Investors are most fearful during a bear market. The weak stock market does not spare deep value bin
stocks that include Newell (NWL), Elanco (ELAN), and 3M (MMM). Their weak prospects and
uncertainties hurt their stock price recently.
What happened?
Newell sold off on August 10, ahead of a $1 billion notes offering on September 9, and slashed guidance.
The consumer products firm cited a more challenging operating and consumer backdrop. Newell expects
an EPS of $1.56 to $1.70. It previously guided from $1.79 to $1.86. Inflation is hurting retail orders, as
consumers pull back spending.
Pet pharmaceuticals firm Elanco (ELAN) broke its $20 support set in the summer. Activist investor
Sachem Head helped set a bottom on ELAN stock recently. However, the firm must contend with a
slowdown in demand in Europe and China. The stock trades at a sub-12x price-to-earnings ratio. Short
float is below 3%.
At its cheapest since 2020, 3M is the best deal. The stock trades at a forward P/E of below 12 times.
Markets are fearful over the litigation suit against 3M’s ear plugs used by the military in the last decade.
The court could demand $100 billion in losses from the earl plug lawsuit. This is nearly double 3M’s
market capitalization. Bet that the court will settle on a more reasonable fine.
