MMM makes a historic move

BY ANDREW GIOVINAZZI

July 29, 2024

Yo Pit Crazies,

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While the big story was the Tech Wreck this week, other stocks are actually doing some very good things. International Business Machines Corp (Ticker: IBM) was up $10 after earnings. It was a stock I rode in my Div+ strategy and still own my IRA. The news here is that some companies can make money on AI. The difference is IBM trades at 17x earnings after the cash pile on the balance sheet as opposed to 100x earnings for ASML NV Group (Ticker: ASML).

30 DAY IBM chart

Looking at the chart of IBM, it looks nothing like the chart of SPX below.

30 Day SPX chart

Mark and I have talked about earnings needing to be perfect for the SPX to rally. So far perfect earrings are not in the Great 8.

So let’s see where the next opportunities are!

Minnesota Mining and Manufacturing Inc (Ticker: MMM) wins the earnings race this cycle

This is a thesis going forward that stocks with very low multiples have adjusted to the higher interest rate regime. While the market has feasted on the Great 8 for two years I think their run will be over or slow down considerably after this cycle. Either way other stocks are showing earnings power. MMM will earn close to $10 a share this year on a $120 number. That is 12x earnings. Crazy low.

MMM 1 Year Chart

I had MMM in my Div+ strategy and Mark has it as a core holding in the OP Portfolio. We will be rolling out our portfolio soon and part of the strategy is looking for diamonds in the rough. The market is full of them right now. Earnings power that is lurking below the surface.

It should be an exciting and profitable 2nd half of the year.

To Your Trading Success,