3M Investment Risks

Investment Risks 3M is a bellwether for the global economy and is a diversified play on the broader market. The The company has maintained operating margins of around company is vulnerable to the same risks faced by the global economy. 20% for most of its segments, but they depend on the cost of base chemicals and other raw materials. If their prices rise, they could cut into 3M's profits. Consumer demand for automobiles has a trickle-down effect on the company's earnings, as much of 3M's lubricants, adhesives and fiber-based products are applied in the automobile manufacturing process. 3M generated almost 15% of its 2012 revenues from sales to automobile manufacturers, and the company's significant exposure to this sector makes it vulnerable to changes in the demand and supply of automobiles. 3M is also highly dependent on its ability to keep innovating. R&D investments have led to Other than the markets that earnings growth for the company, but the company must maintain steady cash flows in order to keep investing in innovative products. the company serves, 3M's stock is also vulnerable to short-term stock price movements that can be based on changes in investor sentiments and the outlook of the economy in general. SOURCES: Company Data, SEC filings, Bloomberg Professional Services BIDNESS DISCLAIMER: Bidness Etc(TM) and related marks are owned by Bidness Etc. Any other trademarks appearing on this website are the property of their respective owners, and are not used to indicate the origin of goods or services offered or provided by Bidness Etc herein or to suggest approval for or affiliation with Bidness Etc. etc. 10.2"