Latest news with #GeneralIndustrialMachinery
Yahoo
01-07-2025
- Business
- Yahoo
3M (MMM): Buy, Sell, or Hold Post Q1 Earnings?
Over the past six months, 3M has been a great trade, beating the S&P 500 by 11.4%. Its stock price has climbed to $151.90, representing a healthy 17.1% increase. This was partly due to its solid quarterly results, and the performance may have investors wondering how to approach the situation. Is now the time to buy 3M, or should you be careful about including it in your portfolio? Check out our in-depth research report to see what our analysts have to say, it's free. We're happy investors have made money, but we don't have much confidence in 3M. Here are three reasons why you should be careful with MMM and a stock we'd rather own. We can better understand General Industrial Machinery companies by analyzing their organic revenue. This metric gives visibility into 3M's core business because it excludes one-time events such as mergers, acquisitions, and divestitures along with foreign currency fluctuations - non-fundamental factors that can manipulate the income statement. Over the last two years, 3M failed to grow its organic revenue. This performance was underwhelming and implies it may need to improve its products, pricing, or go-to-market strategy. It also suggests 3M might have to lean into acquisitions to accelerate growth, which isn't ideal because M&A can be expensive and risky (integrations often disrupt focus). Analyzing the long-term change in earnings per share (EPS) shows whether a company's incremental sales were profitable – for example, revenue could be inflated through excessive spending on advertising and promotions. Sadly for 3M, its EPS and revenue declined by 3.4% and 5.5% annually over the last five years. We tend to steer our readers away from companies with falling revenue and EPS, where diminishing earnings could imply changing secular trends and preferences. If the tide turns unexpectedly, 3M's low margin of safety could leave its stock price susceptible to large downswings. ROIC, or return on invested capital, is a metric showing how much operating profit a company generates relative to the money it has raised (debt and equity). We like to invest in businesses with high returns, but the trend in a company's ROIC is what often surprises the market and moves the stock price. Unfortunately, 3M's ROIC has decreased significantly over the last few years. Paired with its already low returns, these declines suggest its profitable growth opportunities are few and far between. 3M falls short of our quality standards. With its shares beating the market recently, the stock trades at 19.5× forward P/E (or $151.90 per share). This valuation tells us it's a bit of a market darling with a lot of good news priced in - you can find more timely opportunities elsewhere. We'd suggest looking at our favorite semiconductor picks and shovels play. Market indices reached historic highs following Donald Trump's presidential victory in November 2024, but the outlook for 2025 is clouded by new trade policies that could impact business confidence and growth. While this has caused many investors to adopt a "fearful" wait-and-see approach, we're leaning into our best ideas that can grow regardless of the political or macroeconomic climate. Take advantage of Mr. Market by checking out our Top 6 Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025). Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-micro-cap company Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today.
Yahoo
02-06-2025
- Business
- Yahoo
3 Reasons to Avoid DOV and 1 Stock to Buy Instead
Over the last six months, Dover shares have sunk to $177.40, producing a disappointing 13.3% loss - worse than the S&P 500's 2.4% drop. This was partly due to its softer quarterly results and might have investors contemplating their next move. Is there a buying opportunity in Dover, or does it present a risk to your portfolio? Check out our in-depth research report to see what our analysts have to say, it's free. Even with the cheaper entry price, we don't have much confidence in Dover. Here are three reasons why you should be careful with DOV and a stock we'd rather own. Investors interested in General Industrial Machinery companies should track organic revenue in addition to reported revenue. This metric gives visibility into Dover's core business because it excludes one-time events such as mergers, acquisitions, and divestitures along with foreign currency fluctuations - non-fundamental factors that can manipulate the income statement. Over the last two years, Dover's organic revenue averaged 1.6% year-on-year declines. This performance was underwhelming and implies it may need to improve its products, pricing, or go-to-market strategy. It also suggests Dover might have to lean into acquisitions to grow, which isn't ideal because M&A can be expensive and risky (integrations often disrupt focus). Analyzing the long-term change in earnings per share (EPS) shows whether a company's incremental sales were profitable – for example, revenue could be inflated through excessive spending on advertising and promotions. Dover's EPS grew at an unimpressive 7.8% compounded annual growth rate over the last five years. On the bright side, this performance was better than its 1.8% annualized revenue growth and tells us the company became more profitable on a per-share basis as it expanded. If you've followed StockStory for a while, you know we emphasize free cash flow. Why, you ask? We believe that in the end, cash is king, and you can't use accounting profits to pay the bills. As you can see below, Dover's margin dropped by 3.3 percentage points over the last five years. If its declines continue, it could signal increasing investment needs and capital intensity. Dover's free cash flow margin for the trailing 12 months was 11.9%. Dover falls short of our quality standards. Following the recent decline, the stock trades at 18.7× forward P/E (or $177.40 per share). At this valuation, there's a lot of good news priced in - we think there are better stocks to buy right now. We'd recommend looking at a dominant Aerospace business that has perfected its M&A strategy. Donald Trump's victory in the 2024 U.S. Presidential Election sent major indices to all-time highs, but stocks have retraced as investors debate the health of the economy and the potential impact of tariffs. While this leaves much uncertainty around 2025, a few companies are poised for long-term gains regardless of the political or macroeconomic climate, like our Top 5 Strong Momentum Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025). Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-micro-cap company Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today. Error while retrieving data Sign in to access your portfolio Error while retrieving data Error while retrieving data Error while retrieving data Error while retrieving data
Yahoo
30-05-2025
- Business
- Yahoo
Illinois Tool Works (ITW): Buy, Sell, or Hold Post Q1 Earnings?
Over the past six months, Illinois Tool Works's shares (currently trading at $246.98) have posted a disappointing 11% loss while the S&P 500 was down 2.5%. This was partly driven by its softer quarterly results and may have investors wondering how to approach the situation. Is now the time to buy Illinois Tool Works, or should you be careful about including it in your portfolio? Get the full stock story straight from our expert analysts, it's free. Even though the stock has become cheaper, we're swiping left on Illinois Tool Works for now. Here are three reasons why you should be careful with ITW and a stock we'd rather own. Investors interested in General Industrial Machinery companies should track organic revenue in addition to reported revenue. This metric gives visibility into Illinois Tool Works's core business because it excludes one-time events such as mergers, acquisitions, and divestitures along with foreign currency fluctuations - non-fundamental factors that can manipulate the income statement. Over the last two years, Illinois Tool Works failed to grow its organic revenue. This performance was underwhelming and implies it may need to improve its products, pricing, or go-to-market strategy. It also suggests Illinois Tool Works might have to lean into acquisitions to accelerate growth, which isn't ideal because M&A can be expensive and risky (integrations often disrupt focus). Forecasted revenues by Wall Street analysts signal a company's potential. Predictions may not always be accurate, but accelerating growth typically boosts valuation multiples and stock prices while slowing growth does the opposite. Over the next 12 months, sell-side analysts expect Illinois Tool Works's revenue to rise by 1.3%. While this projection indicates its newer products and services will spur better top-line performance, it is still below average for the sector. If you've followed StockStory for a while, you know we emphasize free cash flow. Why, you ask? We believe that in the end, cash is king, and you can't use accounting profits to pay the bills. As you can see below, Illinois Tool Works's margin dropped by 1.8 percentage points over the last five years. If its declines continue, it could signal increasing investment needs and capital intensity. Illinois Tool Works's free cash flow margin for the trailing 12 months was 18.1%. Illinois Tool Works isn't a terrible business, but it doesn't pass our bar. Following the recent decline, the stock trades at 23.3× forward P/E (or $246.98 per share). This multiple tells us a lot of good news is priced in - you can find better investment opportunities elsewhere. We'd recommend looking at a safe-and-steady industrials business benefiting from an upgrade cycle. The market surged in 2024 and reached record highs after Donald Trump's presidential victory in November, but questions about new economic policies are adding much uncertainty for 2025. While the crowd speculates what might happen next, we're homing in on the companies that can succeed regardless of the political or macroeconomic environment. Put yourself in the driver's seat and build a durable portfolio by checking out our Top 6 Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025). Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-small-cap company Comfort Systems (+782% five-year return). Find your next big winner with StockStory today. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
22-04-2025
- Business
- Yahoo
3M's (NYSE:MMM) Q1: Beats On Revenue
Industrial conglomerate 3M (NYSE:MMM) beat Wall Street's revenue expectations in Q1 CY2025, but sales fell by 25.6% year on year to $5.95 billion. Its non-GAAP profit of $1.88 per share was 6.4% above analysts' consensus estimates. Is now the time to buy 3M? Find out in our full research report. Revenue: $5.95 billion vs analyst estimates of $5.69 billion (25.6% year-on-year decline, 4.6% beat) Adjusted EPS: $1.88 vs analyst estimates of $1.77 (6.4% beat) Management reiterated its full-year Adjusted EPS guidance of $7.75 at the midpoint Operating Margin: 20.9%, up from 18.8% in the same quarter last year Free Cash Flow was -$315 million, down from $833 million in the same quarter last year Organic Revenue rose 1.5% year on year, in line with the same quarter last year Market Capitalization: $68 billion Producers of the first asthma inhaler, 3M Company (NYSE:MMM) is a global conglomerate known for products in industries like healthcare, safety, electronics, and consumer goods. Automation that increases efficiency and connected equipment that collects analyzable data have been trending, creating new demand for general industrial machinery companies. Those who innovate and create digitized solutions can spur sales and speed up replacement cycles, but all general industrial machinery companies are still at the whim of economic cycles. Consumer spending and interest rates, for example, can greatly impact the industrial production that drives demand for these companies' offerings. A company's long-term sales performance is one signal of its overall quality. Any business can put up a good quarter or two, but many enduring ones grow for years. 3M struggled to consistently generate demand over the last five years as its sales dropped at a 5.4% annual rate. This was below our standards and suggests it's a low quality business. Long-term growth is the most important, but within industrials, a half-decade historical view may miss new industry trends or demand cycles. 3M's recent performance shows its demand remained suppressed as its revenue has declined by 14.4% annually over the last two years. 3M isn't alone in its struggles as the General Industrial Machinery industry experienced a cyclical downturn, with many similar businesses observing lower sales at this time. We can better understand the company's sales dynamics by analyzing its organic revenue, which strips out one-time events like acquisitions and currency fluctuations that don't accurately reflect its fundamentals. Over the last two years, 3M's organic revenue was flat. Because this number is better than its normal revenue growth, we can see that some mixture of divestitures and foreign exchange rates dampened its headline results. This quarter, 3M's revenue fell by 25.6% year on year to $5.95 billion but beat Wall Street's estimates by 4.6%. Looking ahead, sell-side analysts expect revenue to decline by 2.2% over the next 12 months. Although this projection is better than its two-year trend, it's hard to get excited about a company that is struggling with demand. Today's young investors likely haven't read the timeless lessons in Gorilla Game: Picking Winners In High Technology because it was written more than 20 years ago when Microsoft and Apple were first establishing their supremacy. But if we apply the same principles, then enterprise software stocks leveraging their own generative AI capabilities may well be the Gorillas of the future. So, in that spirit, we are excited to present our Special Free Report on a profitable, fast-growing enterprise software stock that is already riding the automation wave and looking to catch the generative AI next. 3M has managed its cost base well over the last five years. It demonstrated solid profitability for an industrials business, producing an average operating margin of 10.2%. This result isn't surprising as its high gross margin gives it a favorable starting point. Analyzing the trend in its profitability, 3M's operating margin decreased by 2.7 percentage points over the last five years. Even though its historical margin was healthy, shareholders will want to see 3M become more profitable in the future. This quarter, 3M generated an operating profit margin of 20.9%, up 2.2 percentage points year on year. The increase was encouraging, and because its revenue and gross margin actually decreased, we can assume it was more efficient because it trimmed its operating expenses like marketing, R&D, and administrative overhead. We track the long-term change in earnings per share (EPS) for the same reason as long-term revenue growth. Compared to revenue, however, EPS highlights whether a company's growth is profitable. Sadly for 3M, its EPS and revenue declined by 3.4% and 5.4% annually over the last five years. We tend to steer our readers away from companies with falling revenue and EPS, where diminishing earnings could imply changing secular trends and preferences. If the tide turns unexpectedly, 3M's low margin of safety could leave its stock price susceptible to large downswings. Like with revenue, we analyze EPS over a more recent period because it can provide insight into an emerging theme or development for the business. For 3M, its two-year annual EPS declines of 6.2% show it's continued to underperform. These results were bad no matter how you slice the data. In Q1, 3M reported EPS at $1.88, up from $1.71 in the same quarter last year. This print beat analysts' estimates by 6.4%. Over the next 12 months, Wall Street expects 3M's full-year EPS of $7.47 to grow 4.6%. We were impressed by how significantly 3M blew past analysts' revenue expectations this quarter. We were also happy its EPS outperformed Wall Street's estimates. Overall, this quarter had some key positives. The stock traded up 4.2% to $131.18 immediately after reporting. Sure, 3M had a solid quarter, but if we look at the bigger picture, is this stock a buy? What happened in the latest quarter matters, but not as much as longer-term business quality and valuation, when deciding whether to invest in this stock. We cover that in our actionable full research report which you can read here, it's free.
Yahoo
08-04-2025
- Business
- Yahoo
3 Reasons to Sell JBTM and 1 Stock to Buy Instead
Since October 2024, John Bean has been in a holding pattern, posting a small return of 3.7% while floating around $102.36. However, the stock is beating the S&P 500's 10.6% decline during that period. Is there a buying opportunity in John Bean, or does it present a risk to your portfolio? Dive into our full research report to see our analyst team's opinion, it's free. Despite the relative momentum, we don't have much confidence in John Bean. Here are three reasons why there are better opportunities than JBTM and a stock we'd rather own. Tracing back to its invention of the mechanical milk bottle filler in 1884, John Bean (NYSE:JBTM) designs, manufactures, and sells equipment used for food processing and aviation. A company's long-term sales performance can indicate its overall quality. Any business can put up a good quarter or two, but many enduring ones grow for years. John Bean struggled to consistently generate demand over the last five years as its sales dropped at a 2.5% annual rate. This was below our standards and signals it's a low quality business. In addition to reported revenue, organic revenue is a useful data point for analyzing General Industrial Machinery companies. This metric gives visibility into John Bean's core business because it excludes one-time events such as mergers, acquisitions, and divestitures along with foreign currency fluctuations - non-fundamental factors that can manipulate the income statement. Over the last two years, John Bean's organic revenue averaged 2.4% year-on-year growth. This performance was underwhelming and suggests it may need to improve its products, pricing, or go-to-market strategy, which can add an extra layer of complexity to its operations. We track the long-term change in earnings per share (EPS) because it highlights whether a company's growth is profitable. Sadly for John Bean, its EPS declined by 8% annually over the last five years, more than its revenue. This tells us the company struggled because its fixed cost base made it difficult to adjust to shrinking demand. John Bean doesn't pass our quality test. Following its recent outperformance amid a softer market environment, the stock trades at $102.36 per share (or 0.9× forward price-to-sales). The market typically values companies like John Bean based on their anticipated profits for the next 12 months, but there aren't enough published estimates to arrive at a reliable number. You should avoid this stock for now - better opportunities lie elsewhere. We'd recommend looking at a fast-growing restaurant franchise with an A+ ranch dressing sauce. Donald Trump's victory in the 2024 U.S. Presidential Election sent major indices to all-time highs, but stocks have retraced as investors debate the health of the economy and the potential impact of tariffs. While this leaves much uncertainty around 2025, a few companies are poised for long-term gains regardless of the political or macroeconomic climate, like our Top 5 Growth Stocks for this month. This is a curated list of our High Quality stocks that have generated a market-beating return of 175% over the last five years. Stocks that made our list in 2019 include now familiar names such as Nvidia (+2,183% between December 2019 and December 2024) as well as under-the-radar businesses like Sterling Infrastructure (+1,096% five-year return). Find your next big winner with StockStory today for free. Sign in to access your portfolio
