|Bid||171.51 x 1000|
|Ask||172.61 x 800|
|Day's Range||172.21 - 173.99|
|52 Week Range||159.32 - 219.75|
|Beta (3Y Monthly)||1.25|
|PE Ratio (TTM)||18.24|
|Forward Dividend & Yield||5.76 (3.33%)|
|1y Target Est||N/A|
(Bloomberg Opinion) -- To get Brooke Sutherland’s newsletter delivered directly to your inbox, sign up here.It’s going to be unbearably hot across much of the U.S. this weekend, but the early returns on industrial earnings have been decidedly cool. A nearly 30% run in CSX Corp. shares heading into its second-quarter earnings report suggested this was a company where investors thought they could find shelter amid a growing body of worrisome manufacturing data. They were wrong. The shares slumped more than 10% the day after CSX reversed a forecast for low single-digit growth in revenue this year and predicted instead that revenue would dip as much as 2%. The East Coast railroad says it’s being cautious, but the time for conservatism is when you start the guidance-giving process, so that strikes me as an inadequate explanation for such a deep cut. CEO James Foote said the macroeconomic backdrop was one of the most “puzzling” he’s ever experienced and that there are no concrete signs of improvement in weak coal, intermodal and industrial volumes.Elsewhere in transportation, J.B. Hunt Transport Services Inc. and West Coast railroad Union Pacific Corp. actually saw their shares pop on earnings, but that seems to be a case of more realistic expectations than a drastically more positive view of the macroeconomic environment. J.B. Hunt was essentially flat going into earnings, for example, and Union Pacific had sold off in sympathy with CSX before it reported. Union Pacific said it expects second-half volume to be down about 2%, which implies a decline for the full year compared with an earlier call for a low-single digit gain – basically mimicking CSX’s move. The other challenge with CSX is that it appears to be far enough along in its conversion to precision-scheduled railroading that there isn’t as much fat left to cut as there is at Union Pacific. But it’s track record of improved performance is still relatively short, capping its ability to make market share gains amid a surplus of capacity and lower spot rates in the trucking market. Bloomberg News’s Cameron Crise points out the sharp divergence in the performance of S&P 500 railroads and FedEx Corp. over the past, calling it a proxy of sorts for the trade war-inspired slowdown that’s hit companies with international exposure like FedEx harder than those focused on the domestic market. If U.S. railroad stocks fail to recover from the CSX-inspired selloff and the gap to FedEx narrows, that could be a sign that the domestic economy and the bull market are running out of steam, he writes. FedEx, of course, has plenty of idiosyncratic issues holding back its stock. The company’s annual report filed this week included interesting disclosures abut the risk of an activist shareholder getting involved and some additional detail on the logistics investments that could render Amazon.com Inc. a competitor. Things were a bit better at the multi-industrial companies, but there was still cause for concern. Textron Inc. said its aviation backlog slipped by $100 million in the second quarter as macroeconomic concerns and President Donald Trump’s threat to impose wide-ranging tariffs on Mexico spooked business-jet customers. That’s counteracted by Honeywell International Inc.’s report of double-digit sales growth for new business jet equipment, but still a troubling sign of just how nervous people are about making big investments. You can usually count on Honeywell to churn out an earnings beat, and the company didn’t disappoint, raising its profit guidance for the full year. But the outlook wasn’t as robust as some analysts were expecting. Organic sales growth of 5% could end up being the pace to beat this quarter, but that was weaker than anticipated and a forecast for 2% to 4% growth in the third quarter would suggest an accelerating slowdown. The dynamic of somewhat disappointing sales numbers but steady earnings growth in some ways reinforces Honeywell’s argument that last year’s breakups and a pristine balance sheet will make it more resilient in a downturn, but I remain unconvinced that margins for anything except funeral homes are recession-proof. It helped Honeywell that the sales weakness was mostly confined to its safety and productivity solutions unit, the smallest of its four main businesses, and aerospace remained impressively robust with 11% organic sales growth. The industrial companies on tap to report earnings next week may not be so lucky, particularly 3M Co., which seems destined for yet another guidance cut to reflect the deepening slowdown.ALL BOEING WANTS FOR CHRISTMAS IS A FLYABLE MAXBoeing Co. this week pre-announced a $4.9 billion after-tax second-quarter charge to reflect its estimate of compensation owed to airlines grappling with a grounding of the beleaguered 737 Max that’s now entering its fifth month. American Airlines Group Inc., Southwest Airlines Co. and United Airlines Holdings Inc. this week pulled the Max from their schedules through the beginning of November – a timeline that jibes with Boeing’s call for the plane to return to service during the fourth quarter. But the risk remains that the grounding stretches into 2020. The Federal Aviation Administration, mindful of restoring its reputation as the global standard-bearer of safety protocol, is keen to coordinate a return to service with European and Asian regulators. And while a fix for the flight-software system linked to the Max’s two fatal crashes has essentially been completed, there remain hurdles to remedying a separate issue with a microprocessor that was identified in June, including convincing the FAA that a software update is sufficient, according to the Wall Street Journal. Even if Boeing can get the plane recertified and flying again by the fourth quarter, it matters a great deal which particular month that happens. Airlines estimate it will take a month to 45 days to complete the maintenance necessary to bring the Max jets they already operate out of storage, which is to say nothing of the additional planes they had been expecting to support busy schedules. I would imagine airlines’ demands for compensation would rise materially if they are forced to scramble and reassess capacity for holiday flights. Ryanair Holdings Plc said this week it’s prudently planning for a December return of the Max, but pared its growth plans for the 2020 summer travel season. It can only accept six to eight new Max planes per month, which will leave the budget airline with about half of the fleet it had been planning on for that peak season. Data points like that make me highly skeptical of Boeing’s aspirations to ramp up to a 57-per-month production pace for the 737 program in 2020.A WORD ON WAREHOUSESThere has been a surge of spending over the past few years on industrial warehouse assets. The latest deal came this week , when Prologis Inc. agreed to buy Industrial Property Trust and its 236 properties in areas such as the San Francisco Bay Area, Chicago and New Jersey for about $4 billion. This follows Prologis’s acquisition of DCT Industrial Trust Inc. last year for more than $8 billion and its pursuit earlier this year of GLP Pte’s U.S. warehouse assets, which ultimately went to Blackstone Group LP instead for $18.7 billion. Meanwhile, Tom Barrack’s Colony Capital Inc. is exploring a sale of its unit that owns warehouses as part of a strategic review meant to resuscitate its plunging market value, according to Bloomberg News. I understand the logic of these deals: Retailers are under immense pressure to build out their e-commerce capabilities and shorten their delivery times and on the face of it, that trend looks less vulnerable to the trade war and macroeconomic uncertainties than many others. Even so, it gives me pause to hear Honeywell say customers for its Intelligrated warehouse-automation business are pushing major system rollouts into the second half of the year. Intelligrated is still growing rapidly, with organic sales growth of more than 20% for the first half of 2019, and Honeywell CEO Darius Adamczyk said he knew for a fact that the delayed orders hadn’t gone away. But going back to my earlier comment about funeral homes, I’m getting less confident that even this trend can withstand the test of a true downturn. I asked Bloomberg Opinion's retail expert Sarah Halzack what she thought. She pointed out that companies like Walmart Inc. and Williams-Sonoma Inc. are too far along in converting their businesses to e-commerce to back out, whereas those who are already struggling such as J.C. Penney Co. will find it harder to justify making those kinds of investments.DEALS, ACTIVISTS AND CORPORATE GOVERNANCEJohn Flannery has resurfaced. The former CEO of General Electric Co. will now be an advisory director to Charlesbank Capital Partners, a middle-market private equity firm managing more than $5 billion of capital. I’ve always felt a bit bad for Flannery, who spent 30 years working his way up the ladder at GE and finally ascended to the CEO post, only to find out that his actual job was going to be more akin to a garbage man. Sure, he made his share of mistakes as CEO. But the reality is he was probably never going to last in that job no matter what he did. GE needed one CEO to publicize and unearth the skeletons in its closet ($22 billion goodwill writedown on the disastrous Alstom SA deal, $15 billion reserve shortfall in the long-term care insurance business) and another CEO to try to fix the mess. That’s now Larry Culp. Still, it has to sting a bit that Steve Bolze, Flannery’s competitor in the race to succeed Jeff Immelt, is a senior managing director at Blackstone, a slightly more prominent firm than Charlesbank. Bolze is blamed by many investors for mismanaging GE’s power unit and exacerbating the financial pain from a slump in gas turbine demand.Crane Co.’s bid for Circor International Inc. got a last minute surge of support. Mario Gabelli’s Gamco Investors Inc. agreed to tender shares to Crane after the buyer raised its price to $48 a share earlier this month. Roughly 45% of outstanding Circor shares have been elected to be tendered, people familiar with the matter told Bloomberg News. That’s not enough to force a merger (although there are still a few more hours before the tender offer expires at midnight), but it should be enough to get the attention of Circor’s board’s. In the wake of the Crane offer, Circor laid out a bold (and by nature, rather fluffy) plan to boost margins and lower debt. Shareholders are now signaling quite loudly that they don’t have much faith in the company’s ability to follow through. It’s pretty remarkable to see this level of pushback outside of an annual meeting, though. I had worried Crane’s bid might have been the victim of bad timing, with its offer becoming public a few weeks after Circor’s 2019 meeting. The fact that Circor’s board had privately received the Crane offer prior to the meeting and didn’t feel a need to tell investors about it has been one of Gabelli’s chief criticisms. This level of support from Circor shareholders may save Crane from having to wait a year to relaunch its bid with a proxy fight.Osram Licht AG, the lighting maker that’s agreed to sell itself to Bain Capital and Carlyle Group LP, disclosed this week that Austrian industrial manufacturer AMS AG had made a fresh offer for the company at a higher price. Bain and Carlyle are offering 35 euros per share, or 3.4 billion euros ($3.8 billion), while AMS had proposed to pay 38.50 euros per share, or about 3.7 billion euros. The problem is, AMS itself is valued at less than what it offered for Osram; it’s had negative free cash flow for at least the past two years; and it’s already carrying about 1.2 billion euros of net debt. Osram agreed to let AMS perform due diligence, but said the probability of a deal materializing was “rather low.” Literally the same day that its latest offer was disclosed, AMS said it was walking away. In some ways that’s actually kind of surprising – why wouldn’t you take the opportunity to do due diligence? But anyway, this amusing M&A adventure has now come to an end.Callon Petroleum Co. agreed to buy Carrizo Oil & Gas Inc. in an all-stock transaction valued at $3.2 billion including debt. Bernstein analyst Bob Brackett called it a “pretty lame deal all-in-all”, while my Bloomberg Opinion colleague Liam Denning said the merger sounds a “distinct sad-trombone note.” Carrizo helps Callon double down on the Delaware Basin with contiguous acreage and lets it add free cash flow on the cheap, but it also dilutes its status as a pure-play operator by adding acreage the Eagle Ford region, where it may be harder to find cost savings. Some investors may have viewed Callon as a target and are disappointed to see it on the other end of a deal. The consolidation of shale players is healthy and necessary, Liam writes. But the fact that Carrizo has chosen to sell at a modest premium when its stock was trading at the lowest levels in a decade is pretty telling, too.CRH Plc agreed to sell its European plumbing and heating-distribution business to Blackstone for 1.64 billion euros ($1.9 billion). CEO Albert Manifold has been trying to steer the company toward higher growth markets including cement and raise money for acquisitions. This deal helps it do both. Davy analyst Robert Gardiner says the purchase price is attractive at about 16 times earnings before interest and taxes.BONUS READING Saturday Will Be Hot. Oil and Gas Will Be Not: Liam Denning Axalta Is Said to Draw Interest From Kansai Paint and PPG Ex-Cons Find Second Chances Easier to Get in Tight Labor MarketThe Moon Is the Next Frontier in Rivalry Between China and U.S. Porch Pirates Spot Criminal Opening in Amazon Prime Day BonanzaTo contact the author of this story: Brooke Sutherland at firstname.lastname@example.orgTo contact the editor responsible for this story: Beth Williams at email@example.comThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Brooke Sutherland is a Bloomberg Opinion columnist covering deals and industrial companies. She previously wrote an M&A column for Bloomberg News.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
3M Company (NYSE:MMM), a coveted member of the Dow Jones Industrial Average since 1976, is an industrial conglomerate. The group got its start in the early 20th century by extracting corundum mineral.Source: Shutterstock These days, however, 3M stock has expanded beyond corundum to the point of recent conundrum. After reaching an all-time high of $259.77 in Jan. 2018, MMM stock price has been in a multi-month decline. Year-to-date, 3M stock price which has missed the broader market rally in 2019, is down about 8%.As MMM stock gets ready to report earnings on July 25, many of our readers are wondering whether July may offer a good entry point into MMM shares, which are currently trading around $175. Here is a candid look at the the prospects for 3M stock so that potential investors may decide if the shares should belong in their long-term portfolio.InvestorPlace - Stock Market News, Stock Advice & Trading Tips How Does 3M Stock Make Money?Although most consumers first think of 3M's ever-popular signature products, e.g., Scotch Tapes and Post-it Pads, the company produces and sells a diverse line of products ranging from adhesive tapes to air filters, filters for computer screens, heatshrink tubing, knee supports, lint rollers, lubricants, safety goggles, and sand paper.To be more precise, its current product range includes over 50,000 items. In other words, most consumers would probably feel somewhat lost while looking through 3M's website. And very few companies would have the capital, time, or technology to build market share in many of the lines of business.The group divides its business into five segments: * Industrial (such as tapes, adhesives, and supply chain management software); * Safety and Graphics (such as protective gear and security products); * Electronics and Energy (such as fibers and circuits); * Health Care (such as medical and surgical products as well as drug delivery systems); and * Consumer (such office supplies and home improvement products).However, with this kind of growth and business range, a big headache has also come; 3M Company is simply too large to run efficiently, i.e., bigger is not necessarily better. MMM Stock's First-Quarter Results Were DisappointingOn Apr. 25, 3M released Q1 2019 results with lower-than-expected earnings. CEO Mike Roman summed up the earnings results in one sentence when he said "The first quarter was a disappointing start to the year for 3M." * 10 Stocks to Sell for an Economic Slowdown MMM stock's EPS came at $2.23, adjusted vs. $2.49 expected. Revenue was $7.863 billion, instead of the expected $8.025 billion. Management partly blamed a litigation-related pretax charge of $548 million, or 72 cents per share, for the poor results.The group also cut 2019 guidance and announced plans to lay off 2,000 workers. Wall Street was not impressed and the stock tumbled.Going forward 3M's five business segments will be restructured into four. Management has been trying to paint a better future picture for MMM stock as the company believes it will increase productivity, reduce costs, and increase cash flow levels.However, Wall Street is not necessarily hopeful about the company's upcoming Q2 results as many analysts do not necessarily expect 3M stock's results to show any signs of real recovery. Is MMM Stock's Dividend Safe?In a low-interest rate environment, stock investors pay special attention to shares with robust dividend yields. Dividend stocks can be one of the best ways to generate a regular passive income for long-term shareholders.In general, big blue-chip names tend to be consistently generous dividend payers. And 3M, which has increased its dividend for decades, has traditionally been regarded as a safe dividend play.Yet with the recent poor results and on-going issues, analysts have also started wondering whether MMM stock's dividend may also be cut.The dividend payout ratio can show investors if a stock is paying out either less or more than the company earns. In other words, if a company earns $1 per share but pays a dividend of $1.30, management may have to decrease the dividend at some point in the near future. A payout ratio of over 100% means that a company is paying out more in dividends than it earns.MMM stock's payout ratio is 0.59 which makes the dividend sustainable as long as the company keeps the earnings around the current levels. However, in case of a miss in earnings, I'd become sceptical of the dividend amount and would even expect a cut.Experienced dividend investors also pay close attention to a company's free cash flow as dividends are ultimately paid out of cash.Free cash flow is what remains in the bank after 3M has paid interest on its debt, paid any taxes owed, and made all of the capital expenditures necessary to run and invest in the giant business. MMM stock's capital structure has been under stress due to legal liabilities and decreasing revenue.Companies do not cut dividends in good times. And 3M Company is clearly going thorugh a difficult patch in its history. If there were further external events (such as increased trade tensions with China or a slowing down of the U.S. economy) as well as company-specific problems, it is possible that management may take the extraordinary measure of cutting MMM stock's dividend. Where is 3M Stock Price Now?On June 3, MMM stock hit a 52-week low at $159.32. In other words, as it hovers around $175, 3M stock is trading just above its 52-week lows right now. The downtrend since Jan. 2018 as well as Apr. 25, 2019 is a stark reminder that its all-time high of $259.77 is now in the rear-view mirror.If you are an investor who also pays attention to technical analysis, then you may want to know that over the past 18 months, 3M stock has suffered from a damaging technical picture.In addition to its long-term technical chart which still looks weak, MMM stock's short-term technical chart, trend lines and support and resistance levels, are telling investors to exercise caution.Although MMM stock's momentum indicators, which describe the speed at which prices move over a given time period, are currently in oversold territory, they can stay oversold for quite a long time, especially when the overall trend is down.Therefore, buy signals based on momentum indicators need to be conﬁrmed with further chart analysis before the stock is a buy from a technical standpoint.Among 10 Wall Street analysts, there is one strong buy rating, seven hold ratings (which effectively mean sell) and two sell ratings on 3M stock. Recently its price target was cut from $201 to $182. In other words, could MMM share price have already seen the high for 2019?If there is any broader market weakness, say due to market worries over U.S.-China trade wars, 3M stock price may be further adversely affected. * 7 Dependable Dividend Stocks to Buy At this point, the bulls are not yet in control and the selling pressure has increased especially after the Q1 earnings report of April 25. Therefore MMM shares will need a catalyst to make them attractive in the eyes of long-term investors, who are probably still skeptical about the near-term prospects for the company. The Bottom Line on MMM StockI am of the camp that 3M stock's price weakness is a clear reflection of investor sentiment and major fundamental worries, especially regarding a large conglomerate with legal woes and which is going through a major restructuring process amidst falling revenues.If you aren't already long MMM stock, you may want to remain on the sidelines until the earnings report on July 25 to give yourself time to study the balance sheet as well as the outlook by the management. Many questions, such as the effects of the current trade wars, decreasing margins, falling revenues, viability of the dividend as well as the level of free cash flow, remain yet to be answered.If you already own 3M shares, you may also consider initiating covered call positions in conjunction with being long MMM stock. For example, Aug. 16 expiry at-the-money (ATM) covered calls may enable you to hedge your long position in case of profit-taking following the earnings report. You would also be able to participate in a further up move in 3M stock price.If you are considering investing in 3M stock, you may want to start building a position between the $150 and $160, and expect to hold the stock for several years.Investors who are interested in buying into 3M Company shares, but do not want to commit all their capital to a single stock may also consider investing in various exchange-traded Funds (ETFs) that have MMM stock as a holding, including the SPDR Dow Jones Industrial Average ETF (NYSEARCA:DIA), Industrial Select Sector SPDR (NYSEARCA:XLI), or iShares Core High Dividend ETF (NYSEARCA:HDV).As of this writing, the author did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 Stocks Top Investors Are Buying Now * The 10 Best Cryptocurrencies to Keep on Your Radar * 7 Marijuana Penny Stocks That Could Triple (But You Won't Make Money) The post Ahead of Next Week's Earnings, Should Investors Buy 3M Stock Into Weakness? appeared first on InvestorPlace.
Investing.com - Intuitive Surgical (NASDAQ:ISRG) reported second quarter earnings that beat analysts' expectations on Thursday and revenue that topped forecasts.
General Electric is making major changes after a brutal couple of years. Here is what the fundamentals and technical analysis say about buying GE stock now.
3M (MMM) doesn't possess the right combination of the two key ingredients for a likely earnings beat in its upcoming report. Get prepared with the key expectations.
Investors that want the benefit of steadily rising dividends while gaining some defensive exposure via the consumer staples sector do not have to turn to dedicated staples exchange traded funds. Some dividend ...
Investing.com - Citigroup (NYSE:C) reported second quarter earnings that beat analysts' expectations on Monday and revenue that topped forecasts.
3M Co.'s stock price target was cut Friday to $182 from $201 by UBS analyst Damian Karas, who cited recent comments from the industrial, health-care and consumer products company about restructuring and continued deceleration in macro economic data. The cut comes about two weeks before 3M is scheduled to report second-quarter results, ahead of the July 25 open. Karas kept his rating at neutral. He said he believes 3M has some "proving out" to do: "After five guide-downs in five quarters, it is our view that investors will be hesitant to put new money to work in 3M until growth stabilizes and earnings again hit targets. The Q2 FactSet earnings-per-share consensus is $2.05, but that is down from a $2.64 consensus at the end of the first quarter. Meanwhile, the stock rallied 2.3% in afternoon trading, but has tumbled 20.4% over the past three months, while the Dow Jones Industrial Average has gained 3.3%.
The San Antonio oil refiner said that, for decades, manufacturers hid the danger of the foam used to put out fires at its Oklahoma refinery.
3M Company (NYSE:MMM) stock price has fallen slightly this month, even as the market has rallied, partly due to an analyst's downgrade based on legal troubles. 3M stock has long been a defensive pick because of its positions in the consumer-products industry and respectable dividend yield.Source: Shutterstock However, 3M stock price has underperformed after RBC Capital Markets cut its rating on 3M from "Outperform" to "Sector Perform," citing worries about the firm's legal issues as the main reason for its decision. * 10 Best Dividend Stocks to Buy for the Rest of 2019 and Beyond When a stock like 3M underperforms on bad news, the contrarians start chomping at the bit. However before you buy 3M stock on weakness, here are three points to consider.InvestorPlace - Stock Market News, Stock Advice & Trading Tips Environmental UnknownsRBC analyst Deane Dray pointed to 3M's ongoing legal issues regarding chemicals called perfluorooctanesulfonic acid, or PFAS, which have been linked to several illnesses.3M has been accused of knowingly contaminating the food and water supply of the U.S. with high levels of PFAS, resulting in a slew of legal trouble with no end in sight. Because of the widespread use of PFAS, 3M could be bogged down by complaints about the chemicals' environmental impact for the foreseeable future. Dray says the cost of 3M's lawsuits can't be calculated at present because their scope is unclear, but other estimates say the firm might have to pay more than $6 billion, or roughly 6% of its overall market capitalization, to clean up the mess. Earnings IssuesEven disregarding the uncertainty that MMM stock's legal troubles bring to the table, the firm still looks risky. Earlier this year, 3M stock price made its way more than 10% lower after its management cut its 2019 guidance. Not only did the guidance reduction shake investors' confidence, but it signaled somewhat of an emerging trend, as it marked the firm's fourth guidance cut in just over a year. There are a lot of reasons to worry about the building trend, but the biggest concern is the fact that the trend takes away the draw of 3M stock as a defensive play. A lot of investors added 3M to their portfolios because they thought it was a good name to own in case of an economic downturn. However, the more 3M struggles, the less it looks like a good bet if the market turns sour. Growth ConcernsMMM stock's earnings weakness isn't coming out of the blue. Several of the firm's key markets are on the rocks right now, which is hurting the company's sales. 3M stock is particularly exposed to slowing growth in China; nearly a third of the firm's sales come from the Asia-Pacific region. On top of that, 3M is working on a restructuring program that will restructure its business into four separate units. During its first-quarter earnings call, the firm announced its plans to merge its safety and graphics business with its industrial business. The restructuring is bound to create some setbacks at 3M over the next few quarters, especially considering that several of the firm's top executives have elected to leave at the same time. Contrarian Play3M stock is facing several headwinds at the moment, making it a risky bet. Chief among investors' concerns now is the company's exposure to litigation regarding PFAS. The bottom line on MMM stock is that no one knows exactly how far-reaching the consequences will be for 3M as more is discovered about what the company knew when using the chemicals. There's certainly a good contrarian case for buying 3M now, though. If there's one thing we can count on, it's that the public has an extremely short attention span. The list of publicly traded companies that have been in the spotlight for knowingly harming people is extensive, and the majority of those same firms are trading on top of the world right now. So, it's not crazy to think about buying stocks when analysts start their hand-wringing over the latest scandal.Right now, I think worries about the PFAS litigation are overdone. While there has been a lot of chatter about what 3M knew and didn't know regarding the contamination and the negative effects of PFAS, so far, it doesn't appear that the FDA is planning to take any further action. The Bottom Line on MMM StockOf course, 3M stock still carries a lot of risk due to unanswered questions about its PFAS litigation and the slowing growth of its key markets. However, the firm looks capable of coping with these problems, and its respectable 3.48% dividend yield could take the edge of while investors wait for the dust to settle. As of this writing Laura Hoy did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Stocks to Buy for Less Than Book * 7 Marijuana Stocks With Critical Levels to Watch * The 10 Best Dividend Stocks to Buy for the Rest of 2019 and Beyond The post 3 Things to Consider Before Becoming a 3M Stock Contrarian appeared first on InvestorPlace.
The index endured a turbulent week but gained after the Fed Chair indicated that a rate was likely later this month.
On Monday, BASF, the world’s largest chemical company, wreaked havoc on investors by providing a disappointing profit outlook.
[Editor's note: "The 5 Best Industrial Stocks to Buy Today" was previously published in February 2019. It has since been updated to include the most relevant information available.]It's no secret that industrial stocks move and groove with the overall economy. That was kind of a problem last year. Thanks to the worries about slowing global growth and the trade war with China, many industrial stocks fell by the wayside. The broad sector measure of industrial stocks -- the Industrial Select Sector SPDR Fund (NYSEARCA:XLI) -- sank by over 13% last year as investors ran from the economically sensitive sector.But investors may not want to dump industrial stocks just yet.InvestorPlace - Stock Market News, Stock Advice & Trading TipsProgress continues to be made on the trade front and recent meetings between the U.S. and China have gone in a positive direction. Meanwhile, here at home, economic data seems to be stabilizing after a few months of steady drops. With the Federal Reserve pausing on rate hikes and even considering cutting them, we could still see some more quarters of gains for the sector. No wonder why the sector has rebounded in a big way. XLI has jumped nearly 20% so far this year and is leading the market.The best part is that several industrial stocks are still trading for discounts to the overall market. And with that as well as the potential for thawing on tariffs/trade, the sector could be ripe for the picking. * 10 Stocks to Sell for an Economic Slowdown But which industrial stocks could make sense in today's market? Here are five of the best industrials to buy today. Corning (GLW)I bet if I asked you what one of the fastest growing sectors were, glass wouldn't even make into the top five. After all, who uses glass anymore? But for industrial stalwart Corning (NYSE:GLW), glass is driving double-digit revenue growth.That growth from glass is coming from two major factors. First off, GLW is still the fiber optics king and makes solutions for telecom networks, data centers, and networking customers. With cloud computing, the upgrade to 5G wireless and increased data usage all converging, Corning has seen demand for its fiber optic cables surge. In the first quarter, optical communications revenues jumped an impressive 20% year-over-year. With our modern lives demanding, even more, data/connectivity, Corning should see more revenue gains for its optics products.The second factor is device adoption itself. Corning's Gorilla Glass has become the standard on many smartphones, wearable devices, augmented reality displays and now automobile dashboards/infotainment units. For GLW, this again has translated into some impressive revenue growth.All of this has helped profits and cash flows at the firm. After building out capacity last year, sales have translated back in earnings-per-share gains, as core EPS jumped 29% year-over-year . Moreover, GLW has continued to return excess capital to shareholders via buybacks and dividends.With growth still at hand, Corning could be one of the best industrial stocks to own in the quarters ahead. Dover (DOV)Like many industrial stocks, Dover (NYSE:DOV) has its hands in many soups. This includes everything from your local service station's gasoline pump to the refrigeration units at your local grocery store. Its wide product catalog across automation equipment, refrigeration and fluid management has allowed the firm to reward shareholders over its history. DOV has managed to pay an increasing dividend for the last 63 years.And it looks like that streak will continue.DOV has moved forward with some restructuring plans to reduce costs and improve margins. Likewise, accreditive buyouts and bolt-on acquisitions have worked in its favor and have reduced the bumpiness in its refrigeration segment. Because of this, Dover managed to see a 29% adjusted earnings increase during the last quarter. Sales grew by 5%. This highlights that the restructuring is working and the steady nature of Dover's product mix. Many of DOV's products tend to be must-haves for other consumer and industrial applications. This makes them a bit immune to changes in the economy. * 10 Stocks to Sell for an Economic Slowdown With a forward price-to-earnings ratio of 15.80 and a 1.9% yield, Dover could be a great industrial stock to buoy your portfolio. Xylem Inc (XYL)Perhaps one of the most critical commodities out there happens to be water. Moving, cleaning and storing it for our ever-increasing population is becoming a paramount issue. And Xylem Inc (NYSE:XYL) is the industrial stock to make that happen.With its appropriate name, the former spin-off from industrial giant ITT (NYSE:ITT) makes a whole host of equipment like pumps, controllers and filtration devices for wastewater treatment plants across the globe. That's a great position to be in. Growth in water treatment is steady and surging.Here in the U.S., replacing aging water infrastructure has become a top priority. Moreover, XYL has quickly moved in helping utilities with smart-metering, leakage detection and other efficiency applications. That provides plenty of higher margins versus just pumps.Secondly, Xylem's real growth is coming from overseas. Just after its spin-off, Xylem changed its strategy and started looking towards key markets like China, the Middle East and South East Asia. Here, populations are growing and access to clean water is shrinking. Last quarter, XYL managed to score a 12% gain in adjusted net income.The shift to higher margin products and to the emerging world has helped XYL boost its cash flows, reduce its debt and pad shareholder's pockets as well.At a forward P/E of 21.6, XYL isn't super-cheap. But when it comes to industrial stocks, it has an impressive growth profile and it is worth the slight premium. Ingersoll-Rand (IR)Ingersoll-Rand (NYSE:IR) could be leading the pack of industrial stocks … at least when it comes to sector moves. The firm slimmed down in a big way after the recession. And now that many of its peers -- like General Electric (NYSE:GE), Honeywell (NYSE:HON) and United Technologies (NYSE:UTX) -- are splitting apart, IR is building up its portfolio of products.This time, Ingersoll-Rand made its biggest buyout ever. IR agreed to pay $1.45 billion for Precision Flow Systems from a group of private equity investors. Precision Flow makes a bunch of engineered pumps, boosters and other systems for water, chemicals and food and beverage customers. This is an easy bolt-on for IR's current fluids management business and actually would nearly triple the size of its current revenues from the segment.At the same, IR has continued to see more demand from its air conditioning and HVAC unit Trane. Both here and across the world, heating and cooling are often the biggest demanders of electricity/power. With global energy surging, especially in key emerging markets, IR has steadily clipped higher revenues from the unit.All of this has made, IR a growth machine among industrial stocks. The firm saw continuing EPS grow more than 61% during Q1 and more than 24% for all of 2018. * 10 Stocks to Sell for an Economic Slowdown For investors looking for a great growth industrial stock, IR is it. iShares U.S. Industrials ETF (IYJ)Perhaps the best way to play the surge in industrial stocks is to own them all. Here's where exchange-traded funds can come in handy. However, investors may want to bypass the previously mentioned XLI and choose the iShares U.S. Industrials ETF (NYSEARCA:IYJ) instead.For one thing, the IYJ has a much broader portfolio of holdings and includes more mid-cap industrial stocks in its portfolio. These mid-caps have provided plenty of growth as well as being M&A targets for the sector. It has also allowed IYJ to outperform the XLI over the longer haul. Over the last ten years, the iShares fund has managed to produce an average annual return of over 13%. At the same time, you still get plenty of large-cap industrial stocks as well. Top holdings in the ETF include Honeywell, Boeing (NYSE:BA) and 3M (NYSE:MMM).As trade begins to thaw and the economy continues to move along, IYJ should be able to post some impressive returns. In the meantime, investors can clip at 1.3% dividend yield.While IYJ isn't the cheapest ETF in the world -- at 0.43% or $43 per $10,000 invested in expenses -- it's certainly not high-priced. And with a strong performance and breadth of holdings, it could be a great way to play all the industrial stocks out there.As of this writing, Aaron Levitt did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Stocks to Sell for an Economic Slowdown * 7 Marijuana Penny Stocks That I May Buy * 7 of The Best Schwab ETFs for Low Fees The post The 5 Best Industrial Stocks to Buy Today appeared first on InvestorPlace.
The following are not Dogs of the Dow stocks in 2019, but risky looking price charts hint at looming dogged price action in 3M (NYSE:MMM), Caterpillar (NYSE:CAT) and Apple (NASDAQ:AAPL). And the always real possibility of these companies making that list next year is a strong reason to short MMM, CAT and AAPL stock today.Dow Jones stocks sometimes go up and at other times, they go down. Mostly these days, it happens to be the case the bulk of these blue-chips go up. For its part the bellwether average is up nearly 15% on the year and roughly 1% removed from its recent all-time-highs.At the same time, leading Dow constituents Microsoft (NASDAQ:MSFT), Cisco Systems (NASDAQ:CSCO), American Express (NYSE:APX) and Visa (NYSE:V) are up roughly 30% to 35% in 2019.InvestorPlace - Stock Market News, Stock Advice & Trading TipsThe gains are certainly nice, as are AAPL stock's own outperformance of nearly 27%. Still, what goes up does eventually go down. And CAT stock's relative under-performance of 5% and MMM stock's decline of nearly 13.50% are testaments of this cyclical certainty. And if the price charts allow, sometimes investors are even offered a well-placed short stock opportunity. * 10 Stocks to Buy on College Students' Radars With that in mind, MMM, CAT and AAPL stock are in this technically perilous situation right now and ready for shorting. And if today's bearish price patterns behave really dogged in 2019's second half, these three shorts might even land on next year's yield-driven Dogs of the Dow list for buying. 3M (MMM) Click to Enlarge3M is our first bearish Dow Jones stock to short. MMM stock is the worst performer of today's three names. And right now, the chart is offering a good entry point to profit from continued weakness.The weekly chart points to MMM stock following through on the downside out of a bearish flag. The pattern has formed inside a former support area comprised of key Fibonacci levels which failed this past spring and have turned into staunch resistance.The MMM Stock TradeWith shares already confirming the pivot high within the bear flag and stochastics forming a bearish crossover from neutral levels, MMM stock looks like a short today. I'd suggest a stop loss of 8% to contain potential losses and smartly exit if resistance is overcome. Optimistically though, a profitable trend for bears could put shares back toward the 2016 lows near $125. Caterpillar (CAT) Click to EnlargeCaterpillar is our next Dow Jones stock to short. CAT stock is already showing relative weakness this year. But if a weekly price chart showing lower highs and a couple bullish trend failures since late last year have any say, conditions are going to get worse.Bearish operators also have a nice spot to short this Dow Jones stock with limited risk and potentially outsized rewards. Following June's rally, shares have formed a pivot top within a countertrend rally against resistance.The CAT Stock TradeMy recommended strategy in CAT stock is to wait on a short through last week's topping candle low of $133.22. That price confirmation should also help a stochastics set-up that's currently on the cusp of turning lower and signaling a bearish crossover. * 10 Best Stocks for 2019: A Volatile First Half For this Dow Jones stock short I'd suggest a 9% stop and size the position accordingly. Similar to MMM stock, this exit limits losses and closes the position if pattern resistance fails. On the downside, I'd look to take partial and much larger profits on a test of last year's corrective low near $110. Apple (AAPL)Apple is our third and final Dow Jones stock to short. AAPL stock's gains this year are nothing to sneeze at, but a second lower high pivot on the weekly view doesn't look good. And with price action set against a former trend line, the current cycle's 76% resistance level and a mostly favorable-looking stochastics position, an AAPL short looks even better.The AAPL Stock TradeWith Apple stock confirming a pivot high this week as shares moved through $200.65, shares could be shorted today while using a stop-loss above the pattern's candlestick high of $205.08.But I'd wait.Since this Dow stock finished Tuesday modestly above the short signal price, I like placing Apple shares on the radar for shorting on a bearish re-cross of $200.65 for additional confirmation. The entry is also contingent on last week's high remaining intact and of course, using it for keeping risk well-managed off and on the price chart.Disclosure: Investment accounts under Christopher Tyler's management do not currently own positions in securities mentioned in this article. The information offered is based upon Christopher Tyler's observations and strictly intended for educational purposes only; the use of which is the responsibility of the individual. For additional market insights and related musings, follow Chris on Twitter @Options_CAT and StockTwits. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Stocks to Buy on College Students' Radars * 7 Retail Stocks to Buy for the Second Half of 2019 * The S&P 500's 5 Best Highest-Yielding Dividend Stocks The post 3 Technically Fragile Dow Stocks to Short appeared first on InvestorPlace.
When I'm vetting stocks to add to my long-term holdings, I have to think very differently than I do when I'm swing trading or scalping.For one thing, I commit to blocking out the noise and focusing on the company's long-term viability; moreover, I look at its dividend as a sign that the company is in good health and likes to reward loyal shareholders.Source: Shutterstock Besides being a long-standing Dow Jones component, 3M Company (NYSE:MMM) offers a compelling 3.31% dividend yield; that's not too bad at all. That alone wouldn't be enough to convince me to buy 3M stock, though, so I have to weigh a multitude of other factors.InvestorPlace - Stock Market News, Stock Advice & Trading Tips * 7 Retail Stocks to Buy for the Second Half of 2019 3M Stock Price Is NiceTo begin with, the 3M stock price is closer to its 52-week low of $159.32 than its 52-week high of $219.75. Some traders might view that as a red flag, but I'm a contrarian by nature, especially when I'm thinking about the long-term outlook of a stock. In the case of 3M stock, I really like the idea of accumulating shares at the current valuation and collecting dividends until the price reclaims its previous 52-week high.If your broker has granted you permission to trade options - and if you have enough free capital in your brokerage account to buy 100 shares of MMM stock - you could collect what I call a "second dividend" by purchasing 100 MMM shares and selling an at-the-money covered call option. Between the premium payment you'll collect and the quarterly dividend payments, you could actually earn some meaningful income even if 3M stock price stays relatively flat. Analysts Like 3M StockI'm not one to blindly follow analysts' price targets, but I'll generally give more credence to the research firms than the retail crowd because the firms have better research and analysis tools at their disposal. Concerning 3M stock, the average 12-month price target among brokerages that have issued a report on it in the last year is $188.33, indicating an upbeat outlook overall.Citigroup's price target of $221 on 3M stock is particularly optimistic, while Gorden Haskett's $191.98 price objective is also fairly ambitious. The insider buying activity of 3M Director Gregory R. Page, who recently purchased 1,000 shares and is currently the owner of 4,000 shares of the company, is also a positive sign in my humble opinion. You Take the Good, You Take the BadCritics of the company were quick to cite 3M's disappointing first-quarter 2019 earnings report, which was released on April 25. But I'm encouraged by the fact that 3M CEO Mike Roman openly acknowledged that the company's adjusted Q1 EPS of $2.23 versus last year's $2.50 (a drop of 10.8% year-over-year) was disappointing.Beyond just admitting the problem, Roman cited 3M's plan to rectify the company's short-term issues:We have stepped up additional actions - including restructuring - to drive productivity, reduce costs, and increase cash flow as we manage through challenges in some of our end markets.Roman also detailed how 3M plans to reorganize itself in order to meet consumers' demands going forward:We recently implemented a significant portfolio realignment from five to four business groups, which will enable us to better serve our customers and global markets.And let's not ignore the good news: 3M's Q1 GAAP (Generally Accepted Accounting Principles) earnings came in at $1.51 per share, an astounding 54.1% YoY jump. Plus, 3M paid $830 million in dividends to the owners of 3M stock and repurchased $701 million shares of MMM stock during the quarter. For long-term investors like myself, robust dividends and share buybacks are signs that a company is in good health and confident in its own fiscal future. The Bottom Line on 3M StockThe critics will always be able to find something to complain about, but when I look at 3M, I see a Dow stalwart with a solid plan and the potential to beat Q2 expectations; moreover, the compelling 3M stock price and its generous dividend payouts complete the picture of a stock that's earned my seal of approval.As of this writing, David Moadel did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Stocks to Buy on College Students' Radars * 7 Retail Stocks to Buy for the Second Half of 2019 * The S&P 500's 5 Best Highest-Yielding Dividend Stocks The post 3M Stock Is More Than Just a Dividend Darling appeared first on InvestorPlace.