Analytical Review of the Stocks of 3M Company as of 24.05.2016

Analytical Review of the Stocks of 3M Company as of 24.05.2016

24 May 2016, 18:55
Roberto Jacobs
0
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Analytical Review of the Stocks of 3M Company as of 24.05.2016

3M Company, #MMM [NYSE]
Industrial goods, Diversified production, USA

Financial performance of the company:
Index – DJIA, S&P 500;
Beta – 1.11;
Capitalization – 96.20 В;
Return on asset – 15.10%;
Income - 4.83 B;
Average volume – 2.91 М;
P/E - 20.95;
ATR – 2.79.


Analytical review:

  • The company ranks the second on capitalization in the sector of “industrial goods” among the issuers traded in the American stock market;
  • At the end of April the company issued a report for Q1 of the fiscal year 2016, which showed that company’s revenue fell by 2.2% to 7.41 billion USD against the forecast of 7.32 billion USD. At the same time, net profit of the company rose to 1.275 billion USD ($2.05 per share) from 1.199 billion USD ($1.85 per share);
  • At the press-conference company’s management said that improvements in the company’s performance were due to the cut in operational costs. Positive dynamics was demonstrated by such sectors as “Health care” and “Safety”. The rise in revenue of these sectors amounted to 4.0% and 2.9% respectively;
  • Ceradyne Inc., an affiliate of 3M, has recently concluded a contract with the US Department of Defense for 92.7 billion USD on production of 177000 plates for body armor;
  • In the reporting period 3M has increased dividends by 8% and repurchased shares for the amount of 1.2 billion USD. The company issued revised forecast for the period up to 2020. It is expected that within 5 years company’s net profit and volume of sales will increase by 8% and 11%, up to 2%-5% respectively.


Summary:

  • Last company’s report has increased investors’ confidence to the company. Despite pressure from strong USD, revenue and net profit of 3M Company grew up, exceeding analysts’ expectations.
  • The company has strong growth potential. Optimistic development forecast will cause the rise in the price of shares.
  • It is likely that in the near future company’s quotes will go up.


Trading tips for CFD of 3M Company

Key levels:
Support level: 98.55 USD.
Resistance levels: 100.85 USD, 103.85 USD and 106.20 USD.


Medium-term trading, Н1
At the moment the issuer is traded near the local resistance level of 166.55 USD. After breaking out and testing of the level and in case of the respective confirmation (such as pattern Price Action), we recommend to open long positions. Risk per trade is not more than 2% of the capital. Stop order can be placed slightly below the signal line. Take profit can be placed in parts at the levels of 167.70 USD, 169.30 USD and 170.40 USD with the use of trailing stop.

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Medium-term trading, Н1

Short-term trading, М15
The issuer is traded between the local support and resistance levels of 164.75 - 166.45 USD. We recommend to enter the market after breaking out and testing of these levels. Positions shall be opened near the signal line and the nearest support/resistance levels. Risk per trade is not more than 3% of the capital. Stop order can be placed slightly above/below the signal line. Take profit can be placed in parts of 50%, 30% and 20% with the use of trailing stop.


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Short-term trading, М15


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