Replies to post #156 on The Global Demographic Tailwind

[DewDiligence]

Yes, yes, yes, and yes! (eom)

[DewDiligence]

Three 3M Execs Sell $3.2M in Stock

[I never like to see insider selling and, in two of these three cases, executives exercised options that didn’t expire until 2Q11. However, I’m inclined to be more lenient in my view of insider selling at 3M that at a company such as CAT (#msg-46432715) because: i) 3M’s business performance (not just the performance of the stock) has been excellent; and ii) 3M’s business is so diverse that a major problem lurking beneath the surface is highly unlikely. The stock’s valuation is admittedly not cheap, but neither is it expensive, IMO (#msg-46107986).]

http://online.barrons.com/article/SB126605951170345853.html

›FEBRUARY 16, 2010
By AVI SALZMAN

Diversified manufacturer 3M has posted two very strong quarters in a row and its shares hit a two-year high last month. With the stock on a roll, some executives with options have begun to cash them in.

Three 3M (Ticker: MMM) insiders sold a total of $3.2 million over the past week.

Jean Lobey, the vice president for safety, security and protection services, exercised options and sold 27,221 shares on Feb. 11 for $2.2 million, or about $79.35 per share on average. Most of the options were set to expire in May 2011.

John Woodworth, the vice president of corporate supply-chain operations, exercised options and sold 6,396 shares on Feb. 11 for $513,000, or about $80.16 per share on average. His options were set to expire this May. [Since these options were expiring soon, I have less of a problem with this sale than the other two.]

Joaquin Delgado, an executive vice president, exercised options and sold 6,280 shares for $497,000, or about $79.10 per share on average. Delgado's options were set to expire in May 2011.

None of the insiders own more than 1% of the company's stock.

A company spokeswoman says the executives sold because they have limited windows to exercise options that are close to expiring.

The sales represent an increase in selling activity at the company. 3M insiders have sold $4.6 million worth of shares in the past month, versus less than $1 million in the prior 11 months, according to InsiderScore.com. There had been only four sales following options exercises in the past six years [a remarkable record], according to Ben Silverman, research director at InsiderScore.com.

"It's certainly a little bit unusual to see that," he says. "It could be a signal that there are some valuation concerns among insiders."

That said, Silverman does not think investors need to be alarmed by the sales. The company has "lots of moving parts" and the executives may not be making a call on the long-term future of the company. [I agree with this line of thinking, as noted in the prologue of this post.]

"I would caution against getting too bearish," he says.

Indeed, 3M has made progress in improving its business in recent months, closing down less-efficient factories and streamlining its manufacturing and distribution processes. The company handily beat analyst expectations in each of the past two quarters, most recently beating fourth-quarter earnings estimates by nine cents per share for the fourth quarter on Jan. 28. The company has also increased its dividend for the 52nd year in a row.

"3M's fourth-quarter earnings report…was solid across virtually all operating metrics and continues to demonstrate that 3M under its current leadership is making strong progress at not just 'surviving' the Great Recession (due in no small part to the immense sacrifices made by all 3M employees in 2009) but that the company is laying the foundation for enhanced long-term growth as a result of its expanded research and development efforts," wrote Sterne Agee analysts who rate the stock at Neutral.‹

[DewDiligence]

“Thank God we're in emerging markets… places like China, India, and Latin America…are performing very, very well right now.”

—Patrick Campbell, CFO, 3M Corp. (at an investor conference on 2/17/10)

[DewDiligence]

MMM was up 4% today, an unusually large move for such
a stable stock. An analyst at Morgan Stanley is bullish (LOL).

http://finance.yahoo.com/news/3M-shares-rise-after-bullish-apf-4264179920.html?x=0&.v=1

›3M Shares Rise After Bullish Analyst Comments

Tuesday March 30, 2010, 3:18 pm EDT

NEW YORK (AP) -- Shares of manufacturing and technology conglomerate 3M Co. rose Tuesday after a Morgan Stanley analyst said he is "almost certain" the stock will rise over the next 30 days.

Shares jumped $3.01, or 3.7 percent, to $84.37 in afternoon trading. The stock has traded between $48.08 and $85.17 in the past 52 weeks.

Analyst Scott R. Davis cited the possibility of stronger-than-expected quarterly results and said shares have been lagging in recent months. He maintained an "Overweight" rating.

Rival Danaher Corp., which sells to many of the industries that 3M serves, on Monday boosted its first-quarter profit outlook. That suggests 3M could report strong results from the same markets, Davis said.

Furthermore, LCD television sales have been strong in the quarter, which should be good for 3M's display and graphics business unit, the analyst said. These two factors could raise 3M's first-quarter earnings above analysts' expectations.

3M is scheduled to report its quarterly results on April 27.‹

[DewDiligence]

3M Hits Trifecta in Electronics, Autos, and Healthcare

[MMM logged another great quarter as it continues to come up big in emerging markets. As an aside, in the sharp selloff of the broad market on Tuesday, MMM was one of the few stocks to finish in the green.]

http://www.forbes.com/2010/04/27/3M-earnings-healthcare-markets-equities-tape.html

›By Madalina Iacob
04.27.10, 02:01 PM EDT

A spike in demand for electronics, autos and health care-related products helped 3M post record first-quarter earnings. The company that sells everything from Scotch tape to roofing materials and adhesives, posted net income 79% higher than last year's, and the St. Paul, Minn., company boosted its outlook for the year.

Dow 30 component 3M (MMM) said it earned $930 million, or $1.29 a share, from $518 million, or 74 cents a share, a year earlier. This includes a charge of 11 cents per share resulting from the recently enacted health care law. Excluding this charge, first-quarter 2010 earnings were $1.40 per share, “a record for any first quarter in 3M's history,” the company reported.

Investors cheered the results, lifting 3M shares up $1.68, almost 2%, to $89.12.

Net income beat analyst’s expectations and came in at $1.014 billion, or $1.40 per share, versus $563 million, or $0.81 per share, in the first quarter of 2009, while operating income margins were 22.8 percent for the quarter. Each of the company's six business segments posted 20%-plus operating-income margins [!]. Analysts surveyed by Reuters expected earnings of $1.21 a share.

Revenue also increased, 24.7% to $6.3 billion, boosted by a 54.1% spike in sales in Asia Pacific region and a 25.9% jump in the Latin America/Canada regions and demand for electronics and automotive manufacturing.

"By any measure, we are off to a tremendous start in 2010," CEO George Buckley said.
Analysts at Sterne Agee raised their 3M rating from neutral to buy based on the earnings.

“Call it a surprise, call it amazing performance,” wrote Nicholas Heymann, analyst at Sterne Agee, who maintains a price target for the company at $105 for the next six to 12 months.

The company said it expects to report earnings in the range of $5.40 to $5.60 per share, up from previous estimates of $4.90 to $5.10 per share. Sales are forecast to grow at a clip of 10% to 12% this year, compared with a prior outlook of 5% to 7%.‹