Benzinga - by Adam Eckert, Benzinga Staff Writer.
Ritholtz Wealth Management’s Josh Brown is putting money to work outside of tech as he anticipates money rolling into other areas of the market. He’s identified an industrials stock that he says looks more attractive than it has at any point over the last 25 years.
What To Know: Tuesday on CNBC’s “Fast Money Halftime Report,” Brown announced that he bought shares of 3M Company (NYSE:MMM).
“When I see a technical setup like this, I get excited … this is the most excited I’ve been about 3M in the 25 years since I passed my Series 7, ” Brown said.
3M shares have been in a downtrend in recent years, but the stock has started to show signs of life with two significant moves higher since the start of the year.
In March, 3M announced Bill Brown as it’s new CEO, which caused the stock to spike. Brown is the former chairman and CEO of L3Harris Technologies Inc (NYSE:LHX), where he created enormous value, Brown said. In May, the stock spiked again when the company announced a spin-off of its healthcare business and cut its dividend, he added.
“Which is something that typically serves as, believe it or not, an upside catalyst when you have an industrial company that’s been in a freefall for five years, which is the case here,” Brown said.
Brown told CNBC that he bought the stock in anticipation of a technical breakout to the upside. If the stock can get above the $105 to $108 range, it looks ready to turn previous resistance into support and establish a new uptrend, he said.
“I’m front-running the breakout, but I really like this setup here. It’s 13 times forward earnings, everyone hates it, the stock has done nothing forever, it’s in the right sector, great CEO coming in, the decks have been cleared. I think they’re going to figure out the turnaround,” Brown said.
Hightower Advisors’ Stephanie Link, who has a position in 3M, chimed in following Brown’s comments. She noted that when the new 3M CEO was at L3Harris from 2011 to 2020, he delivered total shareholder returns of 731%.
“He’s going to make changes in terms of free cash flow, focus, organic growth, especially on margins … he’s a rockstar,” Link said.
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MMM Price Action: 3M shares closed 0.93% lower at $102.05 on Tuesday, according to Benzinga Pro.
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