Research: 3M’s hidden asset

Article Excerpt

3M’s products go into a huge number of consumer and industrial goods. That cuts the company’s reliance on any specific product or industry, but it also means its sales tend to rise at the same pace as the overall economy, or gross national product (GNP). Some investors see this as a drawback. However, we feel they underestimate 3M’s ability to develop innovative new products that can grow faster than GNP, and speed up 3M’s growth. A good example is its new light-emitting diode (LED) light bulbs, which use 80% less energy than incandescent bulbs. Demand for these products should be strong, as governments mandate the use of environmentally friendly bulbs. 3M is also working on technologies that can piggyback on the success of faster-growing products, such as a film that protects smartphones from scratches. 3M plans to expand its research spending, from around 5.5% of sales in the past few years to 6% in 2017. That will hurt its shortterm…