Watch this pattern. In July, 3M
In 3M's case, the market seems to be fixated on the "buts." If you look back at some recent news stories, you'll see a lot of statements like "3M delivers earnings growth but misses estimates by a penny," and "3M's earnings are strong, but analyst worries about future." I think investors would do well to worry more about 3M's big-picture future and less -- a lot less -- about the minor qualifications that don't seem to have erased 3M's ability to deliver continuously strong results.
And strong growth is not just a thing of the past. From a recent press release: "This strong finish positions us well for continued growth and operational success in 2005." Yikes. After earning $3.75 per share in 2004 (the stock trades for a hardly heady 22 times earnings), 3M sees a very encouraging $4.15 to $4.25 for 2005.
Maybe 3M should borrow the Campbell Soup
It's not as if other blue chips are such mind-blowing investments that 3M's good results look measly by comparison. Consider consumer products giant Procter & Gamble
Heck, megagiant General Electric
And it's not just earnings, which can be influenced by fancy accounting, that are increasing for 3M. The company's free cash flow -- that's operating cash flow minus capital expenditures -- increased to $3.3 billion in 2004 from $3.1 billion last year. That's "Mmm, mmm, great!", but Wall Street is yawning. Don't be lulled into inaction. Such good results won't go on being punished forever, at least in my opinion. There is value building here and, compared with its peers, 3M is looking like a bargain.
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Fool contributor W.D. Crotty does not own stock in any of the companies mentioned.