Macroware Technology
Air Products and Chemicals (APD)
posted Thursday, 18 May 2006
I came across this company in an article on the Yahoo Finance site. Unfortunately this article has been removed by the Trend Desk for some reason. I found a link to a cached version of it on Google though. The article described the importance of water as a resource over the next 20 years. Air Products and Chemicals was listed as a company that provides products in the waste water treatment industry by a research report from UBS Investment Bank that was referenced in the article.
I was wondering if this company was applying nanotechnology in any of its industries including waste water treatment. I found the following article on APD's web site. It appears that they are visionary in the application of nanotechnology in the industries that they service. That lead me to look more closely at this company as a possible nanotechnology investment.
What Air Products and Chemicals Does
For a description of what this company does, see the following link.
Ratio Analysis
The ratio analysis for this company is fairly good. Their profitability ratios are okay and on par with their industry (return on equity of 21.3%, return on capital employed of 13.8%). Their only weaknesses are that their cash to long term debt ratio is very low (0.03) and they had negative cash flow in the previous year. Overall their debt load is not excessive (debt to equity ratio of 1.3). Dividend yield is fairly attractive at 2.1%.
Value Model Analysis
By my value model based on future earnings, this stock is worth $60.59. It is currently trading around $65 so it is not a value by my model.
Rule Breaker Analysis
I didn't do an exhaustive rule breaker analysis. It is pretty obvious that this company is not a rule breaker by the definition.
Conclusion
This company is an interesting nanotechnology investment. It meets many criteria for a good investment without considering the nanotechnology aspect. At the present time I am not investing in it though because there is not too much chance of a huge upside from nanotechnology for this company and it is not a significantly better choice than other options in its industry. If the stock price drops, this might be a good one to buy.
I was wondering if this company was applying nanotechnology in any of its industries including waste water treatment. I found the following article on APD's web site. It appears that they are visionary in the application of nanotechnology in the industries that they service. That lead me to look more closely at this company as a possible nanotechnology investment.
What Air Products and Chemicals Does
For a description of what this company does, see the following link.
Ratio Analysis
The ratio analysis for this company is fairly good. Their profitability ratios are okay and on par with their industry (return on equity of 21.3%, return on capital employed of 13.8%). Their only weaknesses are that their cash to long term debt ratio is very low (0.03) and they had negative cash flow in the previous year. Overall their debt load is not excessive (debt to equity ratio of 1.3). Dividend yield is fairly attractive at 2.1%.
Value Model Analysis
By my value model based on future earnings, this stock is worth $60.59. It is currently trading around $65 so it is not a value by my model.
Rule Breaker Analysis
I didn't do an exhaustive rule breaker analysis. It is pretty obvious that this company is not a rule breaker by the definition.
Conclusion
This company is an interesting nanotechnology investment. It meets many criteria for a good investment without considering the nanotechnology aspect. At the present time I am not investing in it though because there is not too much chance of a huge upside from nanotechnology for this company and it is not a significantly better choice than other options in its industry. If the stock price drops, this might be a good one to buy.
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