3M Stock Analysis | 3M Creating a Potential Multi-Bagger Opportunity
3m stock could create a potential multi-bagger opportunity with a spin-off they just announced. We are one of those sectors which can generate enormous returns for investors if they get it right with the right ingredients. So 3m just announced a spin-off and I believe it could have the potential to be very attractive based on the share price. Trades Once the Spin-Off Company Goes Public Now Dive In.
Note that there is an article that came out recently where they said that 3m is expected to spin off its healthcare business into a new public company.
Now here is the press release which talks about it effectively. Separating that healthcare business and he said a spin-off of its healthcare business resulted in two. World-class public companies will be well-positioned to take forward their respective growth plans. Now the new one will be 3m. Without the healthcare business, it is just the existing company and then there would be healthcare.
3M Creating a Potential Multi-Bagger Opportunity – 3M Stock Analysis
This would be their healthcare segment and the reason why they are doing this is that they want both companies to focus on greater agility in capital allocation. Better have an attractive investment profile. I believe there are two reasons this is being done, one is to reduce some of the debt and the other is to reduce some of the potential litigation liabilities.
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The company’s healthcare products also include the Bear Hugger surgical alert system which is currently the subject of approximately 6 000 lawsuits. 3m says the product has no link to surgical site infections. But it’s something to be aware of. I suspect that due to the increased amount of leverage and possible litigation, the chopped shares could face intense selling pressure.
Could potentially create a fantastic investment opportunity at the right price. Now here’s a little bit more on that lawsuit so far 3m has won a jury-decided case that acts like a bellwether in 2018. However, this does not mean that the approximately 6 000 points could not result in liabilities which are expected to rise further.
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If you want to invest in this spin-off, it’s important for you to know exactly what’s happening now. Ultimately I believe there will only be a class action to figure this out. But it’s important to understand what the potential liability could be from that class action and putting it up. In your valuation when you are determining the valuation of the individual company. So I don’t think we have enough information for that. Yet we may be in their Q4 disclosure from last year where they provide their 10k.
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We might actually have some revelations. But this is an ongoing issue. So when the new company is spun off, it’s really now a matter of looking at what that new company actually does. In which you can see the whole business for 3m.
The largest segment is security and industrial products. Their second largest segment is transportation and electronics. The third largest segment is a segment that is being taken out of healthcare. then finally you have their consumer products segment.
I am not a financial advisor. Always engage a Financial Adviser to advise you on financial decisions. Always do your research as the information and tips shared in these blogs are for educational purposes only. The Information and tips are therefore not investment advice. If you decide to invest without your own research, you do so at your own risk. No rights can be derived from the information discussed in this blog. investing involves risks, you can lose (part of) your investment.