3M - Leading Through Innovation

3M Company (NYSE: MMM), formerly Minnesota Mining and Manufacturing Company until 2002, is an American multinational conglomerate corporation with a worldwide presence.

Founded in 1902, it produces over 75,000 products, including: adhesives, abrasives, laminates, passive fire protection, dental products, electrical materials, electronic circuits, and optical films. 3M has operations in more than 60 countries – 29 international companies with manufacturing operations, and 35 with laboratories. 3M products are available for purchase through distributors and retailers in more than 200 countries, and many 3M products are available online directly from the company.

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I bought my first 50 shares in 3M in Oct 06 at US$68.88 to "test-out-water" in US market trading and sold it at US$73.53 for a small profit of S$291.99.

My initial estimated of the intrinsic value of 3M in 2006 was US$48.73 based on a modest EPS growth projection of 5-9%. The actual EPS growth (including exceptional items) were 24% and 11% for 2006 and 2007. My revised intrinsic value is US$59.49.

3M products command a respectable gross margin of 48%-51% between 2004 to 2007, net margin average more than 15% p.a..