Why Air Products & Chemicals is floating higher today

It appears that a high-profile activist investment firm has built up a significant stake Air products and chemicals (APD 7.88%) and plans to push for changes at the industrial gas producer. Investors are excited by the news, which broke Friday afternoon. As of 11 a.m. ET Monday, shares of Air Products were up 8% from Friday’s close.

Questions about succession, capital allocation

Air Products distributes essential gases to industrial and medical users. Over the past three years, the company’s stock has significantly outperformed its rival Lindecausing some unease among shareholders.

Activist firm Mantle Ridge has amassed a stake of more than $1 billion in the company, according to the filing The Wall Street Journal, and apparently has ideas on how to improve its strategy and capital allocation. It also plans to pressure the board on succession planning for CEO Seifi Ghasemi.

Ghasemi, 80, is one of the oldest CEOs in the S&P 500but succession plans at Air Products were called into question earlier this year when chief operating officer Samir Serhan resigned.

Is Air Products stock a buy?

Mantle Ridge is a well-respected fund with notable past successes including CSX. There is a clear opportunity here given the essential nature of Air Products gases to a variety of industries.

But change takes time and is in the early stages of what could be a protracted change. Investors considering buying may want to wait to see if the excitement from the first day fades in future trading sessions. If it does so, it would have the opportunity to pick up shares of Air Products at prices more similar to those paid by Mantle Ridge when building the stake.