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After falling from a high of $ 180 per share to a low of $ 144.44, the stock offers a great opportunity.
At the moment, I strongly believe that MMM stocks may soon fill their bearish gap of around $ 180.
Coronavirus creates Monster Opportunity for 3M
Just this week, Dr. said. Anthony Fauci, director of the National Institute of Allergy and Infectious Disease, quoted by The New York Post as saying that the coronavirus has risen to a level of “outbreak”, even a “pandemic”.
“We are clearly dealing with an emerging infectious disease that has now reached outbreak proportions and likely pandemic proportions,” says Dr. Fauci. “If you look at, you know, with several definitions of what a pandemic is, the fact is that these are several persistent transmissions of a highly contagious agent in several regions of the world.”
Of course, news like this just causes panic. But for investors, it also creates opportunities.
Trump was able to send $ 1 billion in sales to $ 3 million
It creates great opportunities, especially for face mask companies after the US health and human services say that the US has only 10% of face masks needed for a complete virus pandemic. They estimate that the United States would need at least 3.5 billion medical N95 masks.
Better yet, the Trump administration has plans to get millions of masks from 3M to fight the virus threat. In that case, it could generate up to $ 1 billion in sales for the company. Vice President Mike Pence said at a news conference:
We must ensure and protect the healthcare provider’s health. As the President said, we have more than 40 million masks available today. We have now agreed with 3M. Thirty-five million more masks per month will be produced, and we will also work with other manufacturers.
For 3M, however, it is not just about face masks. It is also increasing global production of respiratory protection and other safety products, “as soon as possible”, the company stated. “In China and around the world, 3M works with customers, distributors, government agencies and medical officials to get deliveries where they are needed most. 3M monitors and responds closely to any effects. ”
Granted, 3M is not the only game in town. Alpha Pro Tech (NYSE: APT) has also benefited from the demand for face masks. When it comes to 3M, however, “The simple reality is that 3M is one of only a handful of S&P names selling a necessary product in virus containers,” according to a report from Melius Research. “This is ignored by the market.”
Melius Research also upgraded the stock to a “buy” from a “holding”.
The conclusion of 3M stock
The biggest catalyst for 3M is coronavirus history.
With the virus spreading rapidly throughout the world community and a severe shortage of face masks, 3M may be one of the largest recipients of demand. Currently with double bottom supports, I strongly believe that 3M will soon fill its $ 180 gap.
Ian Cooper, an InvestorPlace.com contributor, has been analyzing stocks and options for web-based advisory services since 1999. At the time of writing, Ian Cooper had no position in any of the above securities.