Airgas Inc. (NYSE: ARG) is the largest U.S. distributor of industrial gases, medical gases, specialty gases and welding equipment. The firm is also one of the largest U.S. distributors of safety products, the largest U.S. producer of nitrous oxide and dry ice, the largest liquid carbon dioxide producer in the Southeast, and a leading distributor of process chemicals, refrigerants, and ammonia products. More than 14,000 employees work at over 1,100 locations, including branches, retail stores, gas fill plants, specialty gas labs, production facilities and distribution centers.

The firm surprised investors earlier in the week, when it reported fiscal Q4 EPS of 78 cents and revenues of $1.09 billion. Analysts had been looking for 73 cents and $1.07 billion. The CEO noted that strategic product categories (healthcare, research, environmental, food & beverage) posted 11% organic growth in the quarter. The EPS figure was a company record. Management also guided Q1 EPS to 79-81 cents (74 cent consensus) and FY09 EPS to $3.24-$3.40 ($3.10 consensus).

ARG shares popped on the news and have now begun to define a bullish "pennant" consolidation pattern. Prices frequently exit pennants moving in the same direction they were traveling on entry. In this case, that would be to the upside.

Brokers recommend the issue with four "strong buys", four "buys" and four "holds". The ARG Price to Sales ratio (1.17), Price to Book ratio (3.32), Price to Cash Flow ratio (11.28), Price to Free Cash Flow ratio (18.73), Sales Growth rate (27.25%) and EPS Growth rate (44.44%) compare favorably with industry, sector and S&P 500 averages. Institutional investors hold about 80% of the outstanding shares. The stock is one of those used to calculate the S&P 400 MidCap Index. Over the past 52 weeks, it has traded between $37.84 and $58.49. A stop-loss of $50.00 looks good here.

Larry Schutts is a contributing editor for Theflyonthewall.com and the Vice-President of Stockwinners.com. He does not hold a position in the stock discussed above.