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What Led to Airgas’s Surge on November 17?

Renee Blakely

SPY Closed Lower on November 17, EWU Gained on Economic Data

(Continued from Prior Part)

Airgas soared 29.36%

Basic material stock Airgas (ARG), which deals in industrial chemicals and gas, surged 29.4% on Tuesday, November 17. The company announced that it plans to merge into Air Liquide (AIQUY). The merger transaction is valued at $13.4 billion and ARG shareholders plan to receive $143 cash per share. According to the agreement, this is almost a 50.6% premium to ARG’s one-month average share price. This merger would create the world’s largest industrial gas company.

Air Liquide (AIQUY) gained 4.0% after the announcement of this news. The following graph shows the stock price movement of ARG, AIQUY, and its peer company, Praxair (PX), since October 2015.

Airgas (ARG) traded at $137.35 on November 17, which is well above its respective 100-day, 50-day, and 20-day moving averages. The beta of the stock is 0.91, which is less than 1, implying that the stock is less volatile to the broad market movement.

As of November 17, the trailing five-day return was 43.1%, and the trailing one-month return of the stock was 49.4%. The trading volume of the stock surged to 10,029,019 stocks on Tuesday, November 17, from 3,704,569 stocks on the previous day. ARG has already crossed its analysts’ price target of $110.00.

Airgas earned two “buy” and 12 “hold” recommendations, as well as one “sell” recommendation. Moody’s has rated the stock as “Baa2″ and Standard & Poors rated it as “BBB.” Both rating agencies maintained a “stable” outlook for Airgas.

Key stocks

The stocks at the top of the SPDR S&P 500 ETF (SPY) on November 17 were Airgas (ARG), Fossil Group (FOSL), and Netflix (NFLX). These stocks gained 29.4%, 8.5%, and 5.2%, respectively, on the day.

The stocks at the bottom of SPY on November 17 were Keurig Green Mountain (GMCR), Chesapeake Energy (CHK), and Cabot Oil & Gas (COG). These stocks yielded -9.8%, -7.4%, and -6.95, respectively, on the day.

Keurig Green Mountain (GMCR) was scheduled to release its fourth-quarter report on Wednesday, November 18, after market hours. After looking at the company’s past sales performances, investors are anticipating soft brewer sales for the past quarter.

In the final article in this series, let’s look at the UK stock market’s performance on November 17.

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