Waning market valuations since late spring bring back memories of the panic selling of 2008 when even quality companies weren’t immune from investor jitters.

While most investors think of 3M Company (NYSE: MMM) as a consumer company — a reputation which isn’t entirely unwarranted given the popularity of its Nexcare first aid products, Scotch tapes and adhesives and Scotch-Brite cleaning products — it’s in fact an extremely diversified global technology company.

In the first quarter of this year 3M’s Consumer & Office and Health Care divisions accounted for just 14 percent and 17 percent of revenues respectively.

In terms of revenues, the company’s Industrial & Transportation division, which produces industrial abrasives and specialty additives and well as do-it-yourself auto repair products is the largest, generating almost one-third of sales. The remaining two divisions — Safety, Security & Protection and Electronics & Communications — generate almost a quarter of revenues combined and are growing rapidly.

Technologically, 3M spends billions on research and development annually. It’s also a serial acquirer, picking up several smaller outfits with promising products annually. Historically, 3M has devoted about 4 percent of annual free cash flow to acquisitions.

Those efforts have borne fruit in several business segments but the results have been most apparent in the company’s display and graphics division. 3M recently released a new liquid crystal display (LCD) film that enhances brightness and improves the energy efficiency of LCD monitors. It also announced that it has created a unique optical film that allows for 3-D viewing on handheld devices without the need for 3-D glasses.

Amazingly though, 3M’s current valuation gives it little credit for its long history of strong technological innovation or its rock-solid balance sheet. After commanding premium valuations for the first half of the decade, it now trades for just over 4 times book value and 15 times trailing 12-month earnings and just 14 times forward earnings.

While it’s understandable that valuations are lower compared to 3M’s heady growth days, exploding international sales and rapid growth in new product sales easily justify a forward PE ratio closer to 20.

Sales to emerging markets jumped to 29 percent of revenues in the first quarter with global sales — particularly in Asia and Latin America — ballooning to 63 percent of revenues. New product sales, a key measure of the success of a company’s innovation, rose to account for about a third of revenues.

Those trends will continue if not accelerate as 3M deepens its presence in key global markets by developing local supply chains that require less inventory to be kept on hand and reduce costs.

From a pure balance sheet perspective, 3M is in an enviable position. With almost $4 billion in cash, the company generates between $3 billion to $4 billion in free cash flow annually that it uses to fund its acquisitions and aggressive R&D efforts. It also uses little debt in financing its operations with a net debt-to-capital ratio of just 15 percent.

While there’s no doubt that 3M Company’s rapid growth days are behind it, it’s making headway into a number of attractive global markets even as it continues bringing an impressive number of new products to market – factors for which the company’s valuations are receiving little credit. Plus, its broadly diversified product offerings leave its earnings power largely unaffected by the global business cycle.

The market selloff has given us the opportunity to buy into this great company on the cheap. 

WHY TO BUY

3M COMPANY (NYSE: MMM, $78.07)

*Focus on R&D drives a short product development cycle.

*With almost two-thirds of revenue generated overseas, largely immune to US business cycle.