In the congenial world of fly fishing, very little changes.
But recently, the placid corporate environment of fishing equipment was shaken up, as privately held The Orvis Company Inc. from Manchester, Vermont announced it will acquire two corporations, Scientific Anglers and Ross Reels, from 3M Company (NYSE/MMM).
Both businesses will operate separately from the main Orvis business. They must not have been large enough to be meaningful to 3M's earnings results.
Apparently, as a corporation, Orvis is the longest-running mail-order business in the United States. Not only does the company sell good fly fishing equipment, but it also sells clothing, home furnishings, gifts, and even products for your dog.
3M reported first-quarter earnings that could only be described as mediocre. But on the stock market, 3M is trading at an all-time record high with a 2.4% dividend yield and a price-to-earnings (P/E) ratio of approximately 17.
While not expensively priced, earnings for 3M came in at $1.129 billion, or $1.61 diluted earnings per share. This was flat compared to the $1.125 billion, or $1.59 diluted earnings per share, generated in the first quarter of 2012.
3M's first-quarter 2013 sales grew two percent to $7.6 billion.
In February, the corporation authorized another dividend increase of 7.6%, marking the 55th consecutive year of increased dividends.
It also authorized another share buyback program of up to $7.5 billion to pay for its dividends and to keep shareholders happy.
The company's cash and marketable securities position grew to $4.4 billion, up from $3.7 billion. The gain was not as big as those of other corporations, but it was still significant.
3M reduced its full-year earnings outlook just slightly. Top-line growth certainly is an issue for the company, but it's doing all it can to keep shareholders happy-increasing its dividends and buying back shares.
In a more normal environment for stocks, a corporation like 3M would've sold off after such a lackluster earnings report.
If there remains a lack of certainty on the part of consumers, I think it's fair to say that there has been an improvement in certainty among institutional investors. (Read "Make Money in Homebuilders Without Building Homes.")
The numbers from large corporations reveal an improvement in their overall financial health as balance sheets improve. Cash positions are rising, and the costs of interest rates on debt are extremely low.
The improved health of large corporations offers more certainty, and institutional investors are buying it.
The fact that a stable, but slow-growth corporation like 3M is trading at an all-time record high on the stock market illustrates the continued appetite institutional investors have to be buyers.
I view investment risk as going up because of all the new highs, but regardless of this, the fact still remains that big investors are buying.
The monetary party continues until there's a shock.