The Rising Influence of Rising Affluence

[DewDiligence]

Barron’s likes 3M on valuation—the stock is -20% from its 12-month (and all-time) high:

https://www.barrons.com/articles/3ms-forgotten-charms-1536980828

As with other industrials, the threat of tariffs has spooked some investors, as has the dollar’s rise, since 62% of 3M’s revenue comes from overseas. More specifically, investors are worried about operating margins, which fell to 20.4% in the first half of 2018 from 25.1% in the year-ago comparable period. Investors wonder if 3M can offset the raw-material headwinds that are increasing expenses.

…While the recent margin numbers are underwhelming…, combating raw-material increases isn’t something new for a company that’s been around as long as 3M… The risk is that it will take several quarters to improve margins, but it will happen…and that should be a catalyst for the stock to move higher.

...3M shares trade at a price/earnings ratio of 19 times consensus expectations of $11.21 in earnings per share next year, compared with a P/E range of 22-23 in the past five years. The dividend yield is 2.5%.

…If the market continues to rise, 3M should catch a bid. If it drops, 3M should fall less.

Maybe. I have a large position, but it was acquired at an average cost of about $40. I have no plans to either pare or add.