10 Best Conglomerate Stocks to Buy According to Hedge Funds

1) 3M Company (NYSE:MMM)

Number of Hedge Fund Holders: 82

3M Company (NYSE:MMM) offers diversified technology services in the US and internationally.

3M Company (NYSE:MMM)’s delivered a YTD return of more than ~40%, courtesy of the appointment of a new CEO and implementation of strategic initiatives. The new leadership plans to focus on 3 main areas: driving sustained organic growth, improving operational performance, and effective capital deployment. 3M Company (NYSE:MMM) targets to revitalize its R&D efforts to align organic growth with global GDP growth rates. By doing this, the company should regain its innovation edge and capture new market opportunities.

The new CEO’s emphasis on operational execution improvements throughout various areas including facility rationalization and distribution network optimization should unlock significant cost savings and efficiency gains. These initiatives are expected to fuel margin expansion and improve cash flow generation.

Wall Street expects 3M Company (NYSE:MMM) to achieve adjusted operating margins in the mid-20s range. This expansion is expected to stem from self-help measures, such as cost structure optimization, salesforce restructuring, and facility rationalization. 3M Company (NYSE:MMM)’s strong emphasis on distribution network optimization should result in improved supply chain efficiency and reduced costs, supporting margin expansion.

As per Wall Street, with the appointment of a new CEO and the implementation of strategic initiatives, 3M Company (NYSE:MMM) should see a potential turnaround. Analysts at UBS Group raised shares of the company from a “Neutral” rating to a “Buy” rating, increasing the target price from $130.00 to $184.00 on 13^th November.

While we acknowledge the potential of MMM as an investment, our conviction lies in the belief that some deeply undervalued AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for a deeply undervalued AI stock that is more promising than MMM but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock.

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