Due to its very good run since the start of the year, the title of this world number two in industrial and medical gases has stalled, the victim of arbitrations in favor of more cyclical stocks. Stability allows you to bet on a gain of 13% in two months. But beware of the risk.
For three months, the Air Liquide title has been lacking in spring. Renowned for its defensive profile, the action of this world number two in industrial and medical gases, behind the German, Linde, is paying the price, like growth stocks, of renewed optimism from investors on a way out of the health crisis which is reflected in a repositioning on societies more dependent on the economic cycle. However, Air Liquide is far from being unworthy. In the third quarter, thanks to the return to sales growth in three of its four businesses, the group almost returned to a volume of activity comparable to that before the health crisis (-0.9% on a comparable basis ). Only the industrial market segment penalized in the United States is still struggling, while health, electronics and large industries are showing positive momentum. Combined with a program of savings of 400 million this year, this resilience of Air Liquide’s activity should allow it over the entire financial year to improve its current operating margin and to generate a net profit close to last year. Enough to be very confident in the medium term with a strong bet on the development of hydrogen.
Reimbursed at 10 euros under conditions
So these assets are far from being given at 25.5 and 23.7 times the estimated profits for 2021 and 2022, but the stock is one of the very good values of the odds. It can be played by means of a stability issued by Societe Generale with a deadline of February 19, 2021 and two terminals located at 120 euros for the lowest and 160 euros for the highest. The certificate will be reimbursed at 10 euros at maturity provided that the Air Liquide share continues until then to move within the fluctuation zone defined by the two limits. Given its purchase price, the certificate could earn 13.5% in two and a half months. But watch out for the risk factor. This is far from zero, since if you exit from the top or the bottom of this corridor delimited by the two terminals (120/160 euros), the certificate will immediately lose all of its value.
Our advice: buy an Air Liquide stability issued by Société Générale (code: LU2088809855); deadline: February 19, 2021; terminals: 120/160 euros; price: 8.81 euros; portion: 1.