For some time now, it has been very challenging to call 3M (NYSE:MMM)
a bargain on the basis of its probable future cash flow streams.
Investors were willing to pay up for 3M's stability and strong margins,
but a somewhat lackluster second quarter seems to have market
participants reconsidering whether the company deserves that premium.
As
I have said in the past, I'm willing to pay up for quality stories like
3M, but I'm not going to argue that you have to own this stock when Honeywell (NYSE:HON) and General Electric (NYSE:GE)
appear to offer better relative value. I still think there are
arguments for owning 3M in portfolios oriented for long-term
performance, but second-quarter results should serve as a reminder that
even a great company like MMM isn't shielded from short-term performance
and market exposure worries.
Continue here:
3M's High Multiple Likely Magnifying The Disappointment
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