There are still ample unknowns around the shape of the upcoming recovery, but it looks as though 3M (MMM) has managed to get through the worst of the downturn. With the company’s strong exposure to markets like auto, “general manufacturing”, and elective healthcare, I do believe the company should be the beneficiary of some relatively V-shaped recoveries starting later in 2020 and continuing on into 2021.
When I last wrote about 3M, I said that I saw a decent prospective long-term return, but that I liked higher-quality names like Eaton (ETN), Emerson (EMR), Honeywell (HON), ITT (ITT), and Parker Hannifin (PH) even more. Since then, 3M has modestly underperformed the industrial group as a whole and every one of those aforementioned names. 3M shakes out relatively better now on a value basis, but I also see a lot of work ahead for management to improve the operations to a level on par with some of its best peers, and that adds a little tinge of risk to what is otherwise an okay story.
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