3 Big Names to Sell Before This Week’s Reports

Disappointing earnings are in store and investors should flee

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3 Big Names to Sell Before This Week’s Reports

3M

3MLogo 3 Big Names to Sell Before This Week’s ReportsThe multinational industrial company is at risk for a big decline. One of the big consequences of the fiscal cliff debate was a freezing of much economic activity during the fourth quarter. Such indecisiveness by CEOs on purchases and hiring will likely negatively impact earnings at 3M (NYSE:MMM). A poor report would not be welcome news for investors who have bid up 3M shares. Analysts expect 3M to grow profits by less than 10% in 2013. At current prices, shares trade for 14 times 2013 earnings.

On some level you could argue that a higher valuation is justified given the dividends paid by the company, but let’s not make this too complicated. Equity investors generally pay a premium for growth. If that growth isn’t there, the valuation at some point will deteriorate.

Look for this week’s earnings to disappoint and shares to step back from current highs.

See also: 25 Widely-Held Stocks to Dump Now


Article printed from InvestorPlace Media, http://investorplace.com/2013/01/3-big-names-to-sell-before-this-weeks-reports-msft-aapl-t-mmm/.

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