Wednesday, September 19, 2012

Harping on 3M

Yes, I have been harping on 3M as of late. I just think the price/volume setup suggests the stock will trade lower. I also think that because of the companies size in the indexes and penetration into the broader global economy, that watching company can help investors and traders can gauge the health of each. In addition, it is hard to ignore considering the following price relationship.

The price of the 3M vs. the S&P 500 since 1990

The year-over-year price change (in %) since 1991.
 The relationship should be fairly evident, especially over the last 10 years.

Now I mention the company again as the stock is trading down by 1%, relative to what looks like will be a positive open on the broader market. I saw the following comments on the Fly on the Wall this morning.

- 3M says M&A pipeline "looks good", upcoming acquisitions may be "more sizable"
- 3M CEO sees "stretch goal" of 7%-8% organic growth
Says market has changed since organic growth goals set.

What this is telling me is that organic growth is slowing, and the company hopes to buffer a faltering organic outlook via acquisitions.

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