Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link. Trade-Ideas LLC identified 3M ( MMM) as a "water-logged and getting wetter" (weak stocks crossing below support with today's range greater than 200%) candidate. In addition to specific proprietary factors, Trade-Ideas identified 3M as such a stock due to the following factors:
- MMM has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $310.4 million.
- MMM has traded 4.5 million shares today.
- MMM traded in a range 269.8% of the normal price range with a price range of $3.45.
- MMM traded below its daily resistance level (quality: 18 days, meaning that the stock is crossing a resistance level set by the last 18 calendar days. The resistance price is defined by the Price - $0.01 at the time of the signal).
Stocks matching the 'Water-Logged and Getting Wetter' criteria are worthwhile stocks to watch for a variety of factors including historical back testing and volatility. Trade-Ideas targets these opportunities because the stock is exhibiting an unusual behavior while displaying negative price action. In this case, the stock crossed an important inflection point; namely, "support" while at the same time the range of the stock's movement in price is twice its normal size. This large range foreshadows a possible continuation as the stock moves lower. EXCLUSIVE OFFER: Get the inside scoop on opportunities in MMM with the Ticky from Trade-Ideas. See the FREE profile for MMM NOW at Trade-Ideas More details on MMM: 3M Company operates as a diversified technology company worldwide. The stock currently has a dividend yield of 1.9%. MMM has a PE ratio of 20.5. Currently there are 6 analysts that rate 3M a buy, 1 analyst rates it a sell, and 5 rate it a hold. The average volume for 3M has been 2.4 million shares per day over the past 30 days. 3M has a market cap of $89.9 billion and is part of the conglomerates sector and conglomerates industry. The stock has a beta of 1.10 and a short float of 1.7% with 4.99 days to cover. Shares are up 43.8% year-to-date as of the close of trading on Friday. STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more. TheStreetRatings.com Analysis: TheStreet Quant Ratings rates 3M as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, notable return on equity, expanding profit margins and solid stock price performance. We feel these strengths outweigh the fact that the company shows weak operating cash flow. Highlights from the ratings report include:
- MMM's revenue growth has slightly outpaced the industry average of 0.3%. Since the same quarter one year prior, revenues slightly increased by 5.6%. Growth in the company's revenue appears to have helped boost the earnings per share.
- The current debt-to-equity ratio, 0.32, is low and is below the industry average, implying that there has been successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.06, which illustrates the ability to avoid short-term cash problems.
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. When compared to other companies in the Industrial Conglomerates industry and the overall market, 3M CO's return on equity exceeds that of the industry average and significantly exceeds that of the S&P 500.
- The gross profit margin for 3M CO is rather high; currently it is at 51.93%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 15.53% is above that of the industry average.
- Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 47.82% over the past year, a rise that has exceeded that of the S&P 500 Index. Regarding the stock's future course, although almost any stock can fall in a broad market decline, MMM should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
- You can view the full 3M Ratings Report.
STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.