3M stock provides a useful lesson into the sequence of how long-term investors sometimes generate their returns. It is interesting to me how there are certain stocks–particularly in the financial sector like Aflac, Morgan Stanley, and Bank of America–that keep growing earnings and pushing their intrinsic value higher each year, yet investors discard them because the price of the stock has not advanced in a manner consistent with the earnings growth.
Personally, those are the types of companies that I find to be the most straightforward candidates for investment because it is only a matter of “when” the investor community will recognize the improving fundamentals. Other value picks generally require improving business performance plus a recognition of that fact from investors that give it a higher stock price.
3M stock is a great illustration of this principle. In 2004, 3M stock hit a high of $90 per share after posting … Read the rest of this article!