3M Co announced to cut 1500 jobs to lower expenses. To be more precise and to save your precious time, the company plans to get extra $130 million in pretax savings next year by 1 500 job cuts. By the way there are a lot of questions related to these news, we don't know the job structure and of course payslip of 3M, but DW supposes that 1,5 thousand potential unemployed people will find new work places and the company's decision is based on implementing new technologies and hiring highly qualified employees for boosting business efficiency. Therefore, according to the 3rd Quarter Report and other useful sources, our team decided to include the stock of the company into the watchlist. Minnesota Mining and Manufacturing Company or formally known as 3M is an American multinational corporation headquartered in Maplewood, Minnesota. 3M has operations in more than 65 countries including 29 international companies with manufacturing operations and 35 companies with laboratories. 3M products are available for purchase through distributors and retailers in more than 200 countries, and online directly from the company. Chart 1. 3M Business Groups 3M serves customers through five business groups, which increase speed and efficiency by sharing technological, manufacturing, marketing and other resources. Table 1. 3M Business Segment Information This table shows that the total net sales of the company declined from $24.102 billion in 2014 to $22.976 billion in 2015 which was related to 6% reduction in industrial field and 5% fall in E&E. Therefore there was small change in the total operating income, which was $27 million less than in 2014. Chart 2. 3m Key Financials So, 3M key financial figures underlines the financial strength of the company for the last 3 years. For instance, the net sales were about $7.5 billion and $8 billion in every quarter. Therefore the operating income was about $2 billion and net income estimated below $1.5 billion for the last 11 quarters. Table 2. 3M Investment Ratios In 2015 3M plans to pay $4.10 per share at all, which is $0.68 and $1.56 than in 2014 and 2013 respectively. Coupled with 60% stock price growth for the last 3 years we have $0.032 dividend yield in 2015 which is 52% more than in 2014. Unfortunately the book value per share declined from $4.3 in 2013 to $2.9 in 2015 per share because the total liabilities grew up by 27% in comparison with 2014 which was negatively effected on the book value. Finally P/E fall from $28.4 in 2014 to $26.2 in 2015 which was linked to EPS. Chart 3. 3M Diluted EPS From 2012 till 2014 the net sales growth boosted EPS increase in every quarter that is why in 2014 it gained $5.78 which was 11.6% more than in previous year. Despite 8% net sales slump in 2015, the EPS continues to grow and now estimates $6.03 which was related to the lowest market price level in 2015 imputed $140 per share. Table 3. 3M Valuation Multiples After the significant growth from $11.84 in 2013 to $12.88 in 2014 EV/EBITDA fall to $12.47 in 2015 which was related to the 8% sales decline. Moreover, this figure coupled with book value fall in 2014 led to P/Sales and P/Book decrease by 1.6% and 9.5% in 2015. Despite 6% revenue decline in 2015 against 2014 the P/Revenue ratio grew up by 1% which was related just only to the market capitalization of the company. Table 4. 3M Profitability Ratios By the way, 3M has healthy profitability ratios. For instance, despite the sales revenue fall in 2014, the return on sales grew up by 1% which was related just only to approximately unchanged net income figure (-0.5%). Therefore the total assets growth by 15% in 2015 resulted to 11.41% ROA, which underlines that the assets turnover has fallen. Finally, the shareholder's equity growth in 2015 led to 31.05% ROA which is 2.28% and 11.24% more than in 2014 and 2013. That is why, basing on all previous figures, 3M is an overvalued company with good yield. Table 5. 3M Balance Sheet Golden Rule As it usual, Balance Sheet Golden Rule isn't accomplished. The key reason for such result is related to the long-term debt growth 71.7%. Therefore the assets rate of change is the only positive ratio estimated 6.36%. Also the sales decline and tax payments reduction resulted to 0.49% and 4.67% fell in profit rate of change and revenue rate of change ratios respectively. By the way, 3M is a financial sustainable company with a long-term plans and current negative market condition affected in financial performances in 2015. Chart 4. Daily 3M Chart vs S&P 500 As it was previously mentioned, the stock price of 3M Company dramatically grew up. At the moment it costs $158.22 which is $65.37 more than in 2013. From the mid 2014 to Summer 2015 there was a significant rally. August 2015 was a black month for many industries therefore the share price of the company fall to $140 price level in August-September 2015. October was a trend reversal month and at the moment the stock yield is over S&P 500. There is no strong signal for the short. Several indicators forecast a $165 level goal. Also 3M management has a 2016 Restructuring Plan and the first step of this program is to cut 1500 job places. Finally the company plans to invest more in StrongArm Technologies.