It's no secret that 3M Co. (NYSE: MMM ) is one of the best run companies in North America, and it's also no secret that the company's stock valuation of 20 times current earnings is hardly cheap. The company is best understood as a play on global industrial growth, and in this sense it's useful to compare it to other industrial stalwarts, such as�Illinois Tool Works (NYSE: ITW ) and Emerson Electric (NYSE: EMR ) . With�this in mind, investors need to ask themselves what 3M needs to do to make it a good value.
3M's relative value
The graph below offers a look at its valuation compared to Emerson Electric and Illinois Tool Works using enterprise value (market cap plus debt), or EV, over free cash flow:
MMM EV to Free Cash Flow (TTM) data by YCharts
3M looks relatively expensive, which is somewhat of a concern considering that the prospects for Illinois Tool Works and Emerson Electric are also tied to the global industrial economy. A quick look at a breakdown of Illinois Tool Works' operating income by segment reveals how diversified its end markets are. Similarly, Emerson Electric is known for its process control equipment in the energy industry, but it actually makes its money from a wide range of industries.
Top Electric Utility Companies To Watch In Right Now: Bank of America Corporation(BAC)
Bank of America Corporation, a financial holding company, provides banking and nonbanking financial services and products to individuals, small- and middle-market businesses, large corporations, and governments in the United States and internationally. The company?s Deposits segment generates savings accounts, money market savings accounts, certificate of deposits, and checking accounts; and Global Card Services segment provides the U.S. consumer and business card, consumer lending, international card and debit card services. Its Home Loans & Insurance segment offers consumer real estate products and services, including mortgage loans, reverse mortgages, home equity lines of credit, and home equity loans. It also provides property, disability, and credit insurance. The company?s Global Commercial Banking segment offers lending products, including commercial loans and commitment facilities, real estate lending, leasing, trade finance, short-term credit, asset-based lending, and indirect consumer loans; and capital management and treasury solutions, such as treasury management, foreign exchange, and short-term investing options. Its Global Banking & Markets segment provides financial products, advisory services, settlement, and custody services; debt and equity underwriting and distribution, merger-related advisory services, and risk management products; and integrated working capital management and treasury solutions. The company?s Global Wealth & Investment Management segment offers investment and brokerage services, estate management, financial planning services, fiduciary management, credit and banking expertise, and asset management products. Bank of America Corporation serves customers through a network of approximately 5,900 banking centers and 18,000 automated teller machines. It was formerly known as NationsBank Corporation and changed its name on October 1, 1998. Bank of America Corporation was founded in 1874 and is based in Charlott e, North Carolina.
Advisors' Opinion:- [By Anders Bylund]
Bank of America (NYSE: BAC ) suffered more than most megabanks in the financial meltdown of 2008. Its dividend policies have been under a heavy regulatory thumb ever since, but the government recently eased those restrictions a bit. Will Bank of America stock ever become an income-generating powerhouse again?
- [By John Maxfield]
Next up for the too-big-to-fail banks is Bank of America (NYSE: BAC ) , the nation's second-largest bank by assets. B of A reports earnings on Wednesday. And when it does, investors will be watching three things in particular: profits, mortgage origination volume, and expenses.
5 Best Cheap Stocks To Watch For 2014: Advance Auto Parts Inc(AAP)
Advance Auto Parts, Inc., through its subsidiaries, operates as a retailer of automotive aftermarket parts, accessories, batteries, and maintenance items. It operates in two segments, Advance Auto Parts (AAP) and Autopart International (AI). The AAP segment operates stores, which primarily offer auto parts, including alternators, batteries, chassis parts, clutches, engines and engine parts, radiators, starters, transmissions, and water pumps; accessories comprising floor mats, mirrors, vent shades, MP3 and cell phone accessories, and seat and steering wheel covers; chemicals consisting of antifreeze, freon, fuel additives, and car washes and waxes; and oil and other automotive petroleum products. This segment also provides battery and wiper installation, battery charging, check engine light reading, electrical system testing, video clinics and project brochures, loaner tool programs, and oil and battery recycling services; and sells its products through online. The AI segm ent operates stores that offer replacement parts for domestic and imported cars, and light trucks to customers in northeast and mid-Atlantic regions, as well as to warehouse distributors and jobbers in North America. As of January 1, 2011, the company operated 3,369 AAP stores, including 3,343 stores located in the northeastern, southeastern, and Midwestern regions of the United States under the Advance Auto Parts and Advance Discount Auto Parts trade names; 26 stores situated in Puerto Rico and the Virgin Islands under the Advance Auto Parts and Western Auto trade names; and 194 stores under the Autopart International trade name in the United States. It serves do-it-yourself, do-it-for-me, or commercial customers. The company was founded in 1929 and is based in Roanoke, Virginia.
Advisors' Opinion:- [By Ben Levisohn]
Some individual stocks certainly did this week. Chipotle Mexican Grill (CMG) rose 19% to $509.74–a new all-time closing high–despite missing earnings forecasts. Strong same-store sales will do that. Baker Hughes (BHI), meanwhile, gained 11% to $55.55 after the oil-services company reported far stronger earnings than analysts had expected thanks to its business in the Middle East and Asia Pacific. Advance Auto Parts (AAP) gained 20% after purchasing a competitor and making itself the largest auto-parts supplier by revenue.
- [By Daniel Miller]
Rather than pull my money out at the wrong time, as so many people did, I invested in specific trend-bucking, low-beta stocks -- O'Reilly (NASDAQ: ORLY ) , Advance Auto Parts (NYSE: AAP ) , and AutoZone (NYSE: AZO ) . I did so while following Lynch's advice to "invest in what you know." To allow me to tell my story, let me briefly explain what the beta number is and how it works. Then I'll tell you why I picked those stocks and explain how you can do it next time.
- [By Ben Levisohn]
Heading into last night’s earnings report, O’Reilly had returned 50% this year including reinvested dividends, easily besting peers Autozone (AZO), which had returned 22%, Genuine Parts (GPC), which has returned 26%, and Advance Auto Parts (AAP), which had returned 38%,� thanks in large part to a 25% gain in the last month due to its purchase of General Parts International. Clearly, investors thought O’Reilly had something going for it its competitors did not.
- [By CanadianValue]
At the end of 2011, Advance Auto Parts (AAP) and O��eilly Automotive (ORLY) were the fifth- and tenth-largest positions in the Fund, respectively, and together constituted 6.2% of our assets. Auto parts retail is a difficult business for all but the most efficient players. An auto parts retailer must carry literally thousands of hard parts for hundreds of models of cars. Not many people walk in the door needing an alternator for a 1994 Ford, but the person who does is probably experiencing a crisis. The retailer who can manage a substantial investment in slow-turning parts inventory is able to earn a high margin on sales.
5 Best Cheap Stocks To Watch For 2014: Popular Inc.(BPOP)
Popular, Inc., through its subsidiaries, provides a range of retail and commercial banking products and services primarily to corporate clients, small and middle size businesses, and retail clients in Puerto Rico and Mainland United States. It offers deposit products; commercial, consumer, and mortgage loans, as well as lease finance; and finance and advisory services. The company also offers trust and asset management, brokerage and investment banking, and insurance and reinsurance services. As of December 31, 2010, it owned and occupied approximately 94 branch premises and other facilities in Puerto Rico; and 119 offices, including 20 owned and 99 leased in New York, Illinois, New Jersey, California, Florida, and Texas. Popular, Inc. was founded in 1917 and is headquartered in San Juan, Puerto Rico.
Advisors' Opinion:- [By Jake L'Ecuyer]
Popular (NASDAQ: BPOP) shares tumbled 5.54 percent to $27.48 after Morgan Stanley downgraded the stock from Equal-weight to Underweight.
Pacific Coast Oil Trust (NYSE: ROYT) down, falling 7.13 percent to $16.70 after the company priced a public offering by Pacific Coast Energy Company LP and other selling unitholders of 13,500,000 trust units at a price of $17.10 per unit.
- [By Paul Ausick]
Among multinationals, Sterne Agee recommends three banks. The first is Puerto Rico�� Popular Inc. (NASDAQ: BPOP). The mid-cap bank�� stock closed at $28.21 on Friday in a 52-week range of $20.31 to $34.34. Based on Sterne Agee�� 2014 price target of $40.00, Popular has an upside potential of nearly 42% and a 2014 EPS estimate of $2.90. The investment firm�� forward multiple is just 9.6, below the Thomson Reuters consensus multiple of 10.3. Popular received TARP funds in 2009 and could repay the loan in the first quarter of next year, which will give the stock a shot in the arm as well.
5 Best Cheap Stocks To Watch For 2014: Whole Foods Market Inc.(WFM)
Whole Foods Market, Inc. engages in the ownership and operation of natural and organic food supermarkets. The company offers produce, seafood, grocery, meat and poultry, bakery, prepared foods and catering, coffee and tea, nutritional supplements, and vitamins. It also provides specialty products, such as beer, wine, and cheese; body care and educational products, such as books; and floral, pet, and household products. As of February 9, 2011, the company operated 302 stores in the United States, Canada, and the United Kingdom. Whole Foods Market, Inc. was founded in 1978 and is headquartered in Austin, Texas.
Advisors' Opinion:- [By Brendan Byrnes]
In this video segment, Michael explains why Whole Foods Market (NASDAQ: WFM ) is only an "average Joe" among the exceptional companies identified by the study, despite its recent success and the strength of its corporate culture.
- [By Traders Reserve]
Shares of Whole Foods (WFM) were dumped en masse after earnings were released recently. The stock had no chance, being priced for perfection in an environment that was far from perfect.
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