Thursday, July 11, 2013

Air Products & Chemicals (APD) - Stock Hits 5-year High; Volatility Hits Annual High; Earnings Due Out Soon.

APD is trading $96.72, up 0.2% with IV30™ up small. The LIVEVOL® Pro Summary is below.


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Air Products and Chemicals, Inc. has a portfolio of products, services, and solutions that include atmospheric gases, process and specialty gases, performance materials, equipment, and services. It is a supplier of hydrogen and helium and operates in markets, such as semiconductor materials, refinery hydrogen and natural gas liquefaction.

This is both a vol and a stock note as earnings approach. APD has breached an annual high in stock price today as well as an annual high in IV30™ and there is still about two weeks to go before earnings are announced. This is a tricky one b/c having said all that, it's just a 23% vol company... And that has implications...

Let's start with the Charts Tab (one-year) below. The top portion is the stock price, the bottom is the vol (IV30™ - red vs HV20™ - blue vs HV180™ - pink).

On the stock side we can see that Y-O-Y the stock is up from $78.61, so ~a 25% rise.  Nice...  Looking more myopically to the current period, we can see that the price level reached today (the intra-day high) has breached an annual high.  Even more notable, this stock level hasn't been realized since 2008 for APD -- so we're looking at a 5-year high (give or take).

Then there's the vol... Let's turn to the one-year IV30™ chart, below.

While we saw a stock price multi-year high i the first chart, we can see more clearly here that the stock has breached an annual high in the implied as well.  Earnings are due out 7-23-213 BMO, but still, we have a week and a half before that date and we already see annual highs in vol coinciding with a -year high in stock price.  Hmm...

Finally, let's turn to the options Tab for completeness.

Across the top we can see Jul vol is priced to 21.66% and Aug vol is priced to 24.08%.  That vol difference is due to the earnings event.  Here's a point worth observing, outside all of these relative comparisons.  This is a 24% (or whatever) vol stock that has now reached a five-year high in price and an annual high in volatility well ahead of earnings.  Does this feel like a 24% vol "moment in time" for the stock?  I dunno... Maybe it does... In any case, it wouldn't surprise me if the IV30™ hit the 27%-30% range even if the stock keeps rising. So here we see a rising stock and rising vol... There is no "normal."

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