3M (MMM) Offering Possible 56.25% Return Over the Next 22 Calendar Days

3M's most recent trend suggests a bullish bias. One trading opportunity on 3M is a Bull Put Spread using a strike $175.00 short put and a strike $170.00 long put offers a potential 56.25% return on risk over the next 22 calendar days. Maximum profit would be generated if the Bull Put Spread were to expire worthless, which would occur if the stock were above $175.00 by expiration. The full premium credit of $1.80 would be kept by the premium seller. The risk of $3.20 would be incurred if the stock dropped below the $170.00 long put strike price.

The 5-day moving average is moving up which suggests that the short-term momentum for 3M is bullish and the probability of a rise in share price is higher if the stock starts trending.

The 20-day moving average is moving up which suggests that the medium-term momentum for 3M is bullish.

The RSI indicator is at 55.68 level which suggests that the stock is neither overbought nor oversold at this time.

To learn how to execute such a strategy while accounting for risk and reward in the context of smart portfolio management, and see how to trade live with a successful professional trader, view more here


LATEST NEWS for 3M

Were Those Earnings Really That Good?
Tue, 23 Jul 2019 16:14:11 +0000
(Bloomberg Opinion) — Good news comes with baggage for industrial companies this earnings season. United Technologies Corp., Stanley Black & Decker Inc. and Sherwin-Williams Co. all reported better-than-expected second-quarter earnings per share on Tuesday, but each company also gave investors new data points to worry about.For United Technologies, it was the fact that its aerospace businesses seem to be the only thing driving its improved outlook for sales and earnings in 2019. New equipment orders dropped 12% at Carrier in the period and 6% at the Otis elevator division, echoing reports of damped enthusiasm from industrial distributor Fastenal Co. and indications of an overall stagnation in new U.S. factory orders in June from the Institute for Supply Management. Stanley and Sherwin-Williams both left their full-year adjusted profit guidance unchanged despite notable beats in the second quarter, suggesting a cautious outlook on the rest of the year. Indeed, Stanley modestly reduced its expectation for volume growth amid a weaker outlook for industrial and emerging markets. Sherwin-Williams now expects overall revenue to increase only as much as 4% in 2019, down from an April projection of as much as 7%. Both companies think they can make up ground via price increases, but such sales weakness is troubling because Stanley and Sherwin-Williams can also be good proxies for the housing market and consumer demand.Despite the mixed results, stocks of all three companies rose Tuesday. Sherwin-Williams hit a new high and was on track for its biggest gain since 2009, while Stanley saw its biggest intraday gain since December. This is partly a reflection of lowered expectations. Industrial companies within the S&P 500 command a price-earnings ratio of about 17.5, a 10% discount to the broader benchmark’s  valuation of 19.5 times profit. The average discount over the past five years is closer to 4%. Stanley had been down nearly 2% in the year leading up to Tuesday’s earnings report, owing in part to margin pressure it flagged earlier in the year. United Technologies has missed out on a nearly 4% gain in the S&P 500 after announcing a merger with Raytheon Co. that’s roused pushback from activist investors Bill Ackman and Dan Loeb.Generally speaking, though, investors appear to be choosing to prioritize the good headlines over the bad. Pentair Plc rose as much as 5.1% on Tuesday, despite relying mostly on tax benefits to beat analysts' second-quarter earnings estimates and cutting its organic growth guidance for the year. The International Monetary Fund further reduced its global growth outlook on Tuesday, saying a projected pickup from 2019’s pace in 2020 is “precarious,” with the principal risk factors being the U.S.’s various trade battles and Brexit. But for now, industrial companies are drawing on every means they have to keep the boom going, whether that’s relying on the still-robust aerospace market, pushing through price increases and cost cuts, or simply wagering a Federal Reserve interest-rate cut will boost investment.The thing about price increases is they get much trickier to pass along if demand starts to wobble. Stanley is also feeling the pain from the U.S.-China trade war. It now expects a $390 million hit to 2019 earnings from tariffs, currency swings and rising commodity prices, up from $340 million previously. Come 2020, United Technologies’ Carrier and Otis units will be spun off as independent companies, freeing the company from any future underperformance. Currency swings wiped out the modest organic revenue gain at Carrier in the second quarter, leaving it with a 1% decline in overall sales for the first six months of the year, and United Technologies lowered its full-year sales and profit outlook for the division. The flip side of United Technologies’ breakup is that it will be more exposed to an eventual downturn in aerospace markets without those two divisions, something it hopes to offset by expanding its defense business through the Raytheon deal.This willingness to look past trouble spots will be put to the test later this week when Caterpillar Inc. and 3M Co. report.(Updates stock activity in the third and fourth paragraphs.)To contact the author of this story: Brooke Sutherland at bsutherland7@bloomberg.netTo contact the editor responsible for this story: Beth Williams at bewilliams@bloomberg.netThis 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.

The 3% Yield for 3M Stock Makes It an Attractive Value Buy
Tue, 23 Jul 2019 11:56:58 +0000
If you are looking for a blue-chip company that pays a healthy dividend, 3M (NYSE:MMM) stock remains an excellent pick. This is despite the difficulties the industrial conglomerate has faced in recent years.Source: Shutterstock Of course, 3M stock might not hold the same attraction it once did. But if you're a value investor, its 3.3% yield is a nice paycheck. It should hold you over while you wait for management to fix what ails it.Some of my colleagues don't believe 3M can be fixed. Ultimately, they might be proven right. But until that time, I'll continue to recommend MMM stock, especially since it hasn't been this cheap since 2016.InvestorPlace – Stock Market News, Stock Advice & Trading TipsI believe 3M stock is an attractive value buy. Here's why. 3M Stock and Free Cash FlowCEOs make capital allocation decisions every day. * 7 Defense Stocks to Buy to Fortify Your Portfolio These decisions often revolve around debt repayment, business investments, acquisitions, share repurchases and dividend payouts.These five capital allocation decisions decide the fate of companies, large and small, every day.However, it's a lot easier for CEOs when the company is generating positive free cash flow. That's because it doesn't affect actual business operations. This is the money generated in excess of the cash required to keep the business running: the more excess cash flow, the better.In the trailing 12 months ended March 31, 3M had $5.68 billion in free cash flow. That's well ahead of its five-year average of $4.93 billion, and $4.86 billion in 2018.In 3M's Q1 2019 report it had $657 million in free cash flow during the quarter ended March 31, considerably higher than the negative free cash flow of $161 million a year earlier. While free cash flow tends to change from one quarter to the next, it's the long-term trend that matters. Cash Levels Give MMM Stock FlexibilityIn fiscal 2019, 3M expects to generate as much as $5.6 billion in free cash flow, significantly higher than in 2018. In fact, it plans to convert anywhere from 95% to 105% of its net income in the 2019 fiscal year.Any time a business can convert a $1 of income into more than a dollar of free cash flow, the company is operating efficiently. How it allocates this free cash flow determines whether it will continue working at a high level for the immediate future.In 2018, 3M paid out $3.19 billion in dividends to shareholders and repurchased $4.87 billion of its stock. You'll notice that these two capital allocation decisions cost the company more than it generated in free cash flow. It can only afford to do this if it already has significant amounts of cash on the balance sheet.At the end of 2018, 3M had more than $3 billion in cash and marketable securities on its balance sheet. That leaves plenty of flexibility when it comes to capital allocation.As long as MMM stock continues to generate healthy free cash flow, you can rest assured your investment's safe. The ValuationSince the 3M stock price hit a 52-week high of $219.75, it has dropped 21%. That's ominously close to its 52-week low of $159.32, a level it hasn't seen since February 2016.Now, MMM stock has a forward price-earnings ratio of 18.5, far lower than 3M's five-year historical multiple of 23.2 times earnings. In context, 3M's P/E multiple hasn't been this low since 2012.Fixated on free cash flow as I am, MMM stock has a current free cash flow yield of 4.3%. This is based on 2018's free cash flow of $4.86 billion and an enterprise value of $113.6 billion.A traditional value investor might not consider a free cash flow yield of 4.3% to be a value play (8% or higher is typical). But when it pays out $5.76 a year in dividends (3.3% yield), that's a very attractive proposition.3M reports its Q2 2019 results Thursday. As my InvestorPlace colleague James Brumley discussed recently, they're not expected to be very good. The consensus estimate pegs per-share earnings at $2.06, 53 cents shy of last year's results.Brumley sees 3M as a conglomerate that's broken, a long way from reestablishing itself as the powerhouse it once was. He might be right.However, the answer won't be known for several years. In the meantime, the company's working to make itself more efficient.Case in point, the Q2 2019 report will include four operating segments, down from five: Safety & Industrial, Health Care, Transportation & Electronics, and Consumer. This will enable the overall business to serve its customers better while saving costs.3M has always been a business where the various operating segments work together to develop new products and innovations. By merging into four units, instead of five, 3M will be able to innovate faster.Long-term, I think this makes it a more attractive business. But CEO Mike Roman would be the first to admit it's not finished remaking 3M.That's an excellent thing for owners of 3M stock. The DividendThe dividend yield isn't the be-all and end-all. It's more important that a company has a history of raising dividends. 3M has increased its dividend for 61 consecutive years. If 3M stops paying a dividend, you can be sure the world is coming to an end.Seriously, though, it has got a strong track record of dividend payments that ought to be a consolation for people like my colleague who're worried that 3M has lost its seat at the big boys' table.I don't think it has, but we won't know this to be the case until the 3M stock price is much lower than where it is now.As a result, you're getting paid $5.76 per share on an annual basis. That's to accept the additional risk presented by a conglomerate that's possibly lost its focus.Again, I don't believe this is the case. However, you've got to give investors reasons to own your equity. In the case of 3M, I believe that its dividend is a big one.In my opinion, 3M stock is bowed, but not broken.At the time of this writing Will Ashworth did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 Defense Stocks to Buy to Fortify Your Portfolio * 10 High-Flying, Overvalued Stocks in Danger of Crashing * 8 Stocks to Buy That Are Growing Faster Than Amazon The post The 3% Yield for 3M Stock Makes It an Attractive Value Buy appeared first on InvestorPlace.

US Large Cap Indexes Close Higher to Start the Week on Monday
Mon, 22 Jul 2019 23:00:28 +0000
S&P; 500 up 0.28% Continue reading…

Amazon, Facebook, Boeing, Caterpillar and 3M are part of Zacks Earnings Preview
Mon, 22 Jul 2019 16:10:04 +0000
Amazon, Facebook, Boeing, Caterpillar and 3M are part of Zacks Earnings Preview

What's in the Offing for 3M (MMM) This Earnings Season?
Mon, 22 Jul 2019 11:40:11 +0000
3M's (MMM) second-quarter 2019 results might gain from its consumer and health care businesses, and segment-realignment initiatives. Weakness in some end-markets and high costs are concerning.

Be Sociable, Share!

Related Posts

 

MarketTamer is not an investment advisor and is not registered with the U.S. Securities and Exchange Commission or the Financial Industry Regulatory Authority. Further, owners, employees, agents or representatives of MarketTamer are not acting as investment advisors and might not be registered with the U.S. Securities and Exchange Commission or the Financial Industry Regulatory.


This company makes no representations or warranties concerning the products, practices or procedures of any company or entity mentioned or recommended in this email, and makes no representations or warranties concerning said company or entity’s compliance with applicable laws and regulations, including, but not limited to, regulations promulgated by the SEC or the CFTC. The sender of this email may receive a portion of the proceeds from the sale of any products or services offered by a company or entity mentioned or recommended in this email. The recipient of this email assumes responsibility for conducting its own due diligence on the aforementioned company or entity and assumes full responsibility, and releases the sender from liability, for any purchase or order made from any company or entity mentioned or recommended in this email.


The content on any of MarketTamer websites, products or communication is for educational purposes only. Nothing in its products, services, or communications shall be construed as a solicitation and/or recommendation to buy or sell a security. Trading stocks, options and other securities involves risk. The risk of loss in trading securities can be substantial. The risk involved with trading stocks, options and other securities is not suitable for all investors. Prior to buying or selling an option, an investor must evaluate his/her own personal financial situation and consider all relevant risk factors. See: Characteristics and Risks of Standardized Options. The www.MarketTamer.com educational training program and software services are provided to improve financial understanding.


The information presented in this site is not intended to be used as the sole basis of any investment decisions, nor should it be construed as advice designed to meet the investment needs of any particular investor. Nothing in our research constitutes legal, accounting or tax advice or individually tailored investment advice. Our research is prepared for general circulation and has been prepared without regard to the individual financial circumstances and objectives of persons who receive or obtain access to it. Our research is based on sources that we believe to be reliable. However, we do not make any representation or warranty, expressed or implied, as to the accuracy of our research, the completeness, or correctness or make any guarantee or other promise as to any results that may be obtained from using our research. To the maximum extent permitted by law, neither we, any of our affiliates, nor any other person, shall have any liability whatsoever to any person for any loss or expense, whether direct, indirect, consequential, incidental or otherwise, arising from or relating in any way to any use of or reliance on our research or the information contained therein. Some discussions contain forward looking statements which are based on current expectations and differences can be expected. All of our research, including the estimates, opinions and information contained therein, reflects our judgment as of the publication or other dissemination date of the research and is subject to change without notice. Further, we expressly disclaim any responsibility to update such research. Investing involves substantial risk. Past performance is not a guarantee of future results, and a loss of original capital may occur. No one receiving or accessing our research should make any investment decision without first consulting his or her own personal financial advisor and conducting his or her own research and due diligence, including carefully reviewing any applicable prospectuses, press releases, reports and other public filings of the issuer of any securities being considered. None of the information presented should be construed as an offer to sell or buy any particular security. As always, use your best judgment when investing.