Thursday’s first quarter earnings report was the worst day for 3M (MMM)
shareholders in a long, long time, as a huge double-digit miss at the
segment profit line drove a double-digit decline in the share price.
While 3M is not going to burn down, fall over, and sink into the swamp,
the shares are going to be in the penalty box for a while, and
management needs to prove convincingly that they can not only improve
margin execution, but restructure the business in the direction of both great margins/returns and at least decent growth.
3M’s
valuation is much more reasonable than it has been in some time, but
it’s fair to ask and wonder if turning around this supertanker is going
to be a longer process. If the problems really are confined primarily to
auto and electronics, this is a name to investigate further, but I
don’t think investors need to make a snap decision for fear of missing
out, as the concerns about 3M’s growth and execution capabilities have
been building for a while and won’t go away in quarter.
Continue reading here:
3M Decimated On Autos, Electronics, And Execution
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