Friday, February 8, 2019

Reputation Alone Won't Do It For 3M

As a long-term owner of 3M (MMM), there’s certainly a lot I like about this company, but the fact remains that 3M’s exposure to autos, electronics, China, and non-residential construction are not assets right now, and the company lacks the exposure of peers like Honeywell (HON), Danaher (DHR), and Emerson (EMR) to more attractive end-markets like aerospace, process automation, life sciences, and diagnostics. What’s more, I have some long-term concerns about the corporate strategy that I want to address later.

Weaker short-term growth performance and prospects have done their damage, with 3M lagging many/most of its industrial peers in 2018. Even so, the shares aren’t all that cheap on either a DCF or EV/EBITDA basis and there are other names with more interesting near-term stories in the industrial space.

Read more here:
Reputation Alone Won't Do It For 3M

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