3M Company (MMM - Free Report) recently rolled its surgical skin prep solution — 3M SoluPrep Film-Forming Sterile Surgical Solution. The solution will help clinicians fight surgical site infection (SSI) diseases. The latest product leverages the company’s expertise in adhesive and polymer technology.
Inside the Headlines
Per the Centers for Disease Control and Prevention, 1 in 25 patients in a hospital suffers due to healthcare-related infections like SSIs. These diseases are caused due to presence of infectious bacteria in the surgical incision area. In order to reduce the incidence of such diseases, clinicians use anti-microbial agents to reduce the bacteria on a patient’s skin.
3M tries to invent effective solutions for enhancing patient’s surgical outcomes. The company’s new surgical skin prep solution will significantly help remove bacteria from a patient’s skin before any surgical treatment. The solution is composed of 70% isopropyl alcohol and 2% chlorhexidine gluconate (CHG). The copolymer of the solution forms a water-insoluble film and improves the stay of bacteria-killing chemical — CHG. A patient’s skin is able to withstand harshness of simulated surgical conditions on account of this.
Relative to the present widely-used CHG prep, 3M’s latest skin prep solution ensures more CHG remaining on a patient’s skin after simulated surgical conditions such as repetitive wiping. In addition, the solution is more viscous and permits greater visibility than the traditional skin prep solutions available in the market.
What’s Pulling Down 3M Stock?
Over the past three months, 3M’s shares have rallied 6.4%, underperforming 7.1% growth recorded by the industry.
Also, on a P/E(TTM) basis, this Zacks Rank #4 (Sell) stock looks overvalued compared to its industry, with respective tallies of 22.1x and 19.5x for the last three-month period. Notably, the company is currently trading higher than the median P/E(TTM) multiple for the same time frame.
In the last 60 days, the Zacks Consensus Estimate for 3M’s earnings moved south for 2018 and 2019, reflecting negative market sentiments. We notice that rising cost of sales has become a major cause of worry for the company. The metric has surged 3.5% in first-half 2018, primarily due tomaterial cost inflation.
Stocks to Consider
Some better-ranked stocks in the same space are:
Macquarie Infrastructure Company (MIC - Free Report) sports a Zacks Rank of 1 (Strong Buy). The company pulled off an average positive earnings surprise of 8.05% in the last four quarters. You can see the complete list of today’s Zacks #1 Rank stocks here.
Altra Industrial Motion Corp. (AIMC - Free Report) flaunts a Zacks Rank of 1. The company generated an average positive earnings surprise of 4.01% in the trailing four quarters.
Danaher Corporation (DHR - Free Report) carries a Zacks Rank #2 (Buy). The stock came up with an average positive earnings surprise of 4.95% during the same time frame.
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