Peak Financial Exits $2.75 Million 3M Stake as Industrial Giant Eyes Turnaround

On Thursday, Peak Financial Advisors reported selling 18,052 shares of 3M Company worth an estimated $2.75 million, fully exiting its position in the third quarter.

What Happened

According to a filing with the Securities and Exchange Commission released Wednesday, Peak Financial Advisors sold all of its 18,052 shares in 3M Company (NYSE:MMM) during the quarter. The estimated transaction value was $2.75 million, based on the quarterly average share price. The fund reported holding no shares of 3M Company as of the end of the period.

What Else to Know

Before the third-quarter sale, 3M represented about 1.4% of Peak's reported assets.

Top holdings after the third-quarter filing:

• FLXR: $24.9 million (11.9% of AUM)
• GLDM: $19.1 million (9.1% of AUM)
• CTA: $16.2 million (7.8% of AUM)
• MTBA: $15 million (7.2% of AUM)
• EMB: $7.6 million (3.7% of AUM)

As of Thursday morning, shares of 3M Company were priced at $152.66, up 13% over the past year, lagging the S&P 500's 16% gain in the same period.

Company Overview

Company Snapshot

• 3M offers a diversified portfolio across safety and industrial products, transportation and electronics solutions, healthcare products, and consumer goods.
• It generates revenue by manufacturing and distributing proprietary products and solutions, leveraging innovation and global distribution channels.
• The company serves industrial clients, healthcare providers, transportation sectors, and end consumers through both direct and indirect sales networks worldwide.

3M Company is a global industrial conglomerate with a broad product portfolio.

Foolish Take

Peak Financial Advisors’ decision to fully exit its nearly $2.8 million position in 3M Company (NYSE: MMM) marks an interesting break from one of the industrial sector’s most complex turnaround stories. The Denver-based firm—which emphasizes tailored, tax-conscious wealth management—perhaps chose to reallocate capital amid 3M’s uneven fundamentals and sluggish stock performance, which lags the S&P 500 by three percentage points this year.

In its latest quarter, 3M reported $6.3 billion in GAAP sales, up 1.4% year over year, and operating metrics were mixed. The company’s GAAP operating income margin fell from 20.3% to 18%, while operating cash flow came in at negative $1 billion due largely to litigation-related costs tied to synthetic chemicals (PFAS) and Combat Arms earplug settlements. Adjusted results were stronger—EPS rose 12%—but underlying cash strain and legal costs remain headwinds.

CEO William Brown called the results “solid,” and while 3M raised its full-year EPS guidance, investors remain wary as the company restructures and prepares to exit PFAS production. For long-term investors, the story hinges less on near-term margin recovery and more on how sustainable the company's broader turnaround efforts will be.

Glossary

13F assets: Securities and assets that institutional investment managers must report quarterly to the Securities and Exchange Commission (SEC) under Form 13F.

Assets under management (AUM): The total market value of investments managed on behalf of clients by a financial institution or fund.

Quarterly average price: The average price of a security calculated over a specific quarter, used for transaction estimates.

Reportable assets: Investments that must be disclosed to regulators, typically due to size or regulatory requirements.

Dividend yield: Annual dividends paid by a company divided by its share price, expressed as a percentage.

Industrial conglomerate: A large corporation operating in multiple, often unrelated, industrial sectors.

Proprietary products: Goods or solutions developed and owned by a company, often protected by patents or trademarks.

Direct and indirect sales networks: Methods of selling products either directly to customers or through intermediaries such as distributors or retailers.

TTM: The 12-month period ending with the most recent quarterly report.

Jonathan Ponciano has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends 3M. The Motley Fool has a disclosure policy.