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Three Reasons to Take Note of 3M


The company holds up, despite its disappointing outlook and the off market.

Yesterday I was dead tired and dogging it. Today I have more energy than I know what to do with, even after my early-morning treadmill run.

Asian stocks took a bit of a pummeling overnight. The Hang Seng and the Nikkei were off 1.44% and 1.34%, respectively. European stocks, however, were in positive territory early this morning. And here in the US, we're currently trading higher.

Here's what I'm seeing this fine but rain-soaked Wednesday morning:

3M (MMM):
The company that brings us "Post-Its" offered up its outlook and unfortunately, it wasn't too terrific: It indicated it's looking for $4.50 to $4.55 a share excluding items in 2009. The estimate I'm seeing is $4.57. And for 2010, it's looking for $4.85 and $5 a share, whereas the estimate I see is $4.94.

Some thoughts:

1. If it were to hit those numbers, it wouldn't be the end of the world for a giant like 3M. And something tells me its management may actually be playing it a bit on the conservative side.

2. I also think it's a good sign that it didn't take too much of a whooping, despite the market being off yesterday and the disappointing news.

3. That said, 3M's shares are pretty fairly valued right here and I don't see any real reason to bottom-fish -- and I feel that way even though it could rebound early in today's session. My cautious tune may change, though, if it pulls back to the high $60s or lower $70s.

Texas Instruments
The company was out with its fourth-quarter outlook. Per the release, it indicated it was looking for "EPS: $0.47-$0.51, compared with the prior range of $0.42-$0.50." It also goosed its revenue outlook.

My take:

1. Sounds pretty good, but I'm concerned that some might not see it as strong enough -- the bar is often set pretty high for this company.

2. The outlook was good news and the stock remains one of my top long-term favorites. It could still have some legs here in the short-run too, which is why I view a dip as a potential opportunity.

3. The company has been whipping estimates over the last several quarters -- you have to love that.
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No positions in stocks mentioned.

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