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3M Co. Gets Downgraded, But We Are Staying Long

3M Co (MMM) got downgraded by Moody's yesterday, citing "an imminent increase the amount of debt in its capital structure" as the reasoning behind the downgrade. 3M Co has definitely been in rally mode recently with the company outperforming the S&P500 by a factor of 2 over the last 12 months (see chart).

(click to enlarge)

If one had a large position in this company, it may be prudent now to take some profits off the table and rebalance into other underlyings. Nevertheless, our portfolio's theme is to invest small. Currently our position in 3M Co is using $16,600 of capital, which is 3.6% of the capital we have invested. This percentage will drop as we increase our capital invested. Let's look at the fundamentals of this company and why I believe there is still substantial growth ahead even though their debt levels are increasing.

The chart below illustrates the… Read More …