Timing is everything, the conventional wisdom says – and six of the gurus we follow at GuruFocus may be re-examining their own timing today, at least as it regards 3M (MMM, Financial). Of course, timing could always be helped by a crystal ball.
On Thursday, 3M reported stronger third-quarter earnings than anticipated. The company posted earnings of $1.3 billion, or $1.98 a share, up from $1.23 billion, or $1.78 per share. Analysts anticipated $1.96 per share.
The Wall Street Journal reported that 3M, along with Caterpillar (CAT, Financial), Visa (V, Financial) and Chevron (CVX, Financial), fueled more than half of the Dow’s nearly 217-point gain, “one of its largest single-day gains of the year.”
As of June 30, those gurus – Bill Nygren (Trades, Portfolio), Jeremy Grantham (Trades, Portfolio), Robert Olstein (Trades, Portfolio), Joel Greenblatt (Trades, Portfolio), Paul Tudor Jones (Trades, Portfolio) and MS Global Franchise Fund (Trades, Portfolio) – either reduced or sold entirely their holdings in 3M. Only guru Ray Dalio (Trades, Portfolio) added 3M stock to his portfolio.
Although the news was better than expected for 3M, things could always be better still. Sales were up 2.8 percent to $8.1 billion; experts were expecting $8.2 billion. Nevertheless, it was pretty good news across the board for 3M. Sales rose across its five business units and were led by a 4.7 percent gain in its health care segment.
Shares in the company were up more than 5 percent to $146, the biggest intraday gain in three years.
“As we look forward,” 3M CEO Inge Thulin said, “our focus will remain on actively managing the portfolio and strategically investing in the business to continue delivering profitable growth across the company.”
GuruFocus’ subscribers probably weren’t as surprised as other observers by the earnings report. An article published on this site in September reported that 3M’s strategies – like its diversified product portfolio – had the company poised for real growth.
Caterpillar’s earnings were better than expected, Sam Ro of Business Insider reported. “Adjusted earnings jumped to $1.72 per share, which was much stronger than the $1.35 expected by analysts. Revenue increased to $13.55 billion, which was healthier than the $13.20 billion expected.”
More of the gurus who held stakes in Caterpillar had a better day than the ones who invested in 3M. Seven of the gurus we follow traded Caterpillar stock on June 30. Two – Paul Tudor Jones (Trades, Portfolio) and John Burbank (Trades, Portfolio) – added the stock to their portfolios. One – Joel Greenblatt (Trades, Portfolio) – increased his existing stake. Three other gurus – Ken Fisher (Trades, Portfolio), David Dreman (Trades, Portfolio) and Manning & Napier Associates – reduced their holdings, and one – Louis Moore Bacon (Trades, Portfolio) – sold all of his holdings.
Based in Minnesota, 3M began as a mining operation and evolved into a manufacturer of masking and cellophane tapes as well as other products, like Post-It notes and industrial adhesives.
Caterpillar, the world's leading maker of earthmoving equipment, diesel and natural gas engines, industrial gas turbines and diesel-electric locomotives, is headquartered in Peoria, Illinois.
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