Exchange of 3M For Neogen. Worth it?

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mumbadevi
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Exchange of 3M For Neogen. Worth it?

Post by mumbadevi »

3M is offering exchange of their stock at 100 to 107forNeogen (Neog)which has products related to food and animal safety and the stock is down 50% for the year and pays 0 dividend. 3M pays 4% dividend and the stock is down 25% for the year anyone knows about Neogen and care to comment about this deal? Thanks :(
homebuyer6426
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Re: Exchange of 3M For Neogen. Worth it?

Post by homebuyer6426 »

Boring Boglehead answer:

Buying individual stocks has a poor risk/reward ratio. In addition, both of those stocks underperformed the total market in 10, 5, 3 and 1 year periods. You're better off in an index fund.
45% Total Stock Market | 52% Consumer Staples | 3% Short Term Reserves
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Nate79
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Re: Exchange of 3M For Neogen. Worth it?

Post by Nate79 »

The better exchange would be for VTI.
kerplunk
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Re: Exchange of 3M For Neogen. Worth it?

Post by kerplunk »

You are unlikely to find any fortune tellers in the Bogleheads community. This is one reason most of us only invest in widely diversified funds like a total U.S. stock market index. Best of luck with your decision.
Super Hans
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Re: Exchange of 3M For Neogen. Worth it?

Post by Super Hans »

It's not going well for me with the ~10% drop in MMM today. Maybe it's best to stay the course with VTI, even when confronted with these special opportunities.
dbr
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Re: Exchange of 3M For Neogen. Worth it?

Post by dbr »

To understand what is going on you should read up on the 3M/Neogen deal and decide how you want to handle your choices.

This forum is pretty well based on mutual fund investing as inspired by Jack Bogle at Vanguard and will give you consistent advice to hold only diversified low cost index funds, or at least mutual funds and/or ETFs if not index.

The financial analysis behind this is that individual stocks carry diversifiable risk that says a large collection of similar stocks can be held at less risk at no loss of return than can a single stock. Stock picking is known to be difficult to do consistently.
Fishing50
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Re: Exchange of 3M For Neogen. Worth it?

Post by Fishing50 »

If the reason you bought 3M is no longer valid, you should sell it.
I still own a few stocks because I don’t want to pay capital gains tax to sell.
I take the dividends in cash so the positions grow slower and become a smaller position in the portfolio.
Retired Military Officer. 80% equites / 20% bonds for life, ZERO emergency fund, 100% taxable in equities (dividends in cash), 33% taxable, 30% Roth, 37% tax deferred. Gone Fishing At 52yrs old!
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JazzTime
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Re: Exchange of 3M For Neogen. Worth it?

Post by JazzTime »

mumbadevi wrote: Fri Aug 19, 2022 11:58 am 3M is offering exchange of their stock at 100 to 107forNeogen (Neog)which has products related to food and animal safety and the stock is down 50% for the year and pays 0 dividend. 3M pays 4% dividend and the stock is down 25% for the year anyone knows about Neogen and care to comment about this deal? Thanks :(
I have the same question as you and know nothing about Neogen. Unfortunately, it appears no one on this forum is able to help. I'm not sure why some BHers provide non-responsive comments like "buy VTI" or "don't own individual stocks." That's hardly helpful.

It's a shame that a multi-faceted company such as MMM is being punished over a trivial product line like ear plugs that were part of an acquisition. Thank you plaintiff's bar!
The difficulty with jazz is there are too many notes. (Borrowed from Emperor's critique in Amadeus)
BPnWhiskey
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Re: Exchange of 3M For Neogen. Worth it?

Post by BPnWhiskey »

I don't think anyone is trying to be non-responsive.

If you were interested in getting informed opinions on whether the pulled pork plate or the (pork) ribs were the best choice at a given restaurant, you should not be shocked if the fine folks on a halal or kosher forum didn't give you a direct answer.

The OP posted a very specific question about one company's stock and its relative merit to a spin-off (from what I gather), but chose to ask it on a forum whose members are dedicated to the idea that single-company stocks are not the best way to invest. Namely, they believe in buying funds that include 1000s of stocks because they are convinced that almost no one is talented enough to beat the overall market consistently enough to justify the added risk of concentrating on individual stocks. The folks replying here are simply admitting that they don't have a good answer because they don't play that particular game.

It's not like we hide what we're about here: BH investment philosophy.
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arcticpineapplecorp.
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Re: Exchange of 3M For Neogen. Worth it?

Post by arcticpineapplecorp. »

ask the magic 8 Ball:
https://magic-8ball.com/
It's hard to accept the truth when the lies were exactly what you wanted to hear. Investing is simple, but not easy. Buy, hold & rebalance low cost index funds & manage taxable events. Asking Portfolio Questions | Wiki
VanGar+Goyle
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Re: Exchange of 3M For Neogen. Worth it?

Post by VanGar+Goyle »

mumbadevi wrote: Fri Aug 19, 2022 11:58 am 3M is offering exchange of their stock at 100 to 107forNeogen (Neog)which has products related to food and animal safety and the stock is down 50% for the year and pays 0 dividend. 3M pays 4% dividend and the stock is down 25% for the year anyone knows about Neogen and care to comment about this deal? Thanks :(
I know very little about Neogen, but this sounds like the 1996 spinoff of Imation from 3M.
You may make 7% to start, and be positive for a year, but Bogleheads who invest in a S&P 500 index or Dow Jones Industrial Average index fund would sell it [ Neogen] as soon as possible.
Bogleheads who invest in a total stock market index, would keep the new Neogen shares, but not tender all their 3M shares.
Also as the NYTimes noted in 1996, some index funds and income funds would sell any Imation/Neogen shares they received, so there may be a short term drop in price. Vanguard 500 Index Fund alone owns 2.19% of 3M shares.
dbr
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Re: Exchange of 3M For Neogen. Worth it?

Post by dbr »

JazzTime wrote: Sat Aug 27, 2022 7:03 pm
mumbadevi wrote: Fri Aug 19, 2022 11:58 am 3M is offering exchange of their stock at 100 to 107forNeogen (Neog)which has products related to food and animal safety and the stock is down 50% for the year and pays 0 dividend. 3M pays 4% dividend and the stock is down 25% for the year anyone knows about Neogen and care to comment about this deal? Thanks :(
I have the same question as you and know nothing about Neogen. Unfortunately, it appears no one on this forum is able to help. I'm not sure why some BHers provide non-responsive comments like "buy VTI" or "don't own individual stocks." That's hardly helpful.

It's a shame that a multi-faceted company such as MMM is being punished over a trivial product line like ear plugs that were part of an acquisition. Thank you plaintiff's bar!
No, people on this forum would be not helpful because most people on this forum don't hold individual stocks and those who might very likely don't hold 3M or Neogen and have never heard of this particular corporate transaction. To make decisions about what to do with corporate changes like this that affect your stock holdings you have to dig into the financial particulars and figure things out.

I agree with you that telling people who have an individual stock question to not hold individual stocks is not helpful. There is a Morningstar forum on stocks where an ask may get more response, but even then this is very specialized issue. Maybe asking a stock broker for advice would work, maybe. https://community.morningstar.com/s/top ... GAE/stocks
dbr
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Re: Exchange of 3M For Neogen. Worth it?

Post by dbr »

A first hit on a simple Google search gives this: https://www.fool.com/investing/2021/12/ ... investors/

You can probably find more if you dig into it.
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NateH
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Re: Exchange of 3M For Neogen. Worth it?

Post by NateH »

mumbadevi wrote: Fri Aug 19, 2022 11:58 am 3M is offering exchange of their stock at 100 to 107forNeogen (Neog)which has products related to food and animal safety and the stock is down 50% for the year and pays 0 dividend. 3M pays 4% dividend and the stock is down 25% for the year anyone knows about Neogen and care to comment about this deal? Thanks :(
I own MMM and I am not taking them up on the exchange. If I don't know anything about Neogen, why would I invest in it?
4X top-twenty S&P 500 prognosticator. I'd start a newsletter, but it would only have one issue per year. | dumb investor during 1999 tech bubble, current slice & dicer.
VanGar+Goyle
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Re: Exchange of 3M For Neogen. Worth it?

Post by VanGar+Goyle »

The tender was due last month, and it looks like it was fully subscribed, so if you did not try to get neogen shares, you should not get any shares of neogen or spinco.
https://investors.3m.com/news/news-deta ... fault.aspx
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William Million
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Re: Exchange of 3M For Neogen. Worth it?

Post by William Million »

I recently acquired MMM and like it going forward.
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