Seeking Alpha: Does 3M Have Enough Cards Left To Play?

The current management team at 3M (NYSE:MMM) has done a lot to address the issues that used to contribute to the stock's historical relative undervaluation. Management has streamlined the company and boosted margins, maintained a strong internal R&D culture, continued to diversify geographically (particularly into faster-growing emerging markets), levered up to buy back shares, and gotten active on strategic M&A.

The market has noticed, and over CEO Inge Thulin's tenure the shares have outperformed the S&P 500 by about 15%. The shares have also outperformed peers/comps like General Electric (NYSE:GE) while keeping up with the likes of Honeywell (NYSE:HON), Danaher (NYSE:DHR), and Illinois Tool Works (NYSE:ITW).

The question I have, though, is whether 3M has enough cards left to play to continue that run of outperformance. Next year is looking pretty rough for the "general industrial" markets that make up a lot of 3M's business, not to mention the emerging markets that contributes to about one-third of the company's sales. Along similar lines, 3M doesn't have a lot of exposure to commercial aerospace or construction and I'm not sure there's too much left to accomplish on the restructuring side. Large M&A is still a possibility, but a transformative deal that moves the company into new markets would frankly be a little out of character.

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Does 3M Have Enough Cards Left To Play?