Having recently written that I'd be willing to sell 3M (NYSE:MMM) in the face of its take-no-prisoners valuation if I could find a good enough replacement idea, Honeywell (NYSE:HON)
seemed like a logical place to look. I'm happy with what I found, as
Honeywell offers broad multi-industry exposure but has built itself with
a "be the best or be gone" mentality. Honeywell is also pursuing some
fairly ambitious (but reasonable) margin and ROIC improvement targets
that could have it near the top of the list of its peers in three to
five years' time.
Now for the catch - investors aren't exactly
getting a fallen angel or hidden gem here. Honeywell's quality and
self-improvement plans are not secrets and even with some concerns about
the company's exposure to falling oil prices, the shares aren't dirt
cheap. Management could add value by a faster/better margin acceleration
and/or by leveraging the balance sheet and acquiring more businesses. I
haven't decided if I'm going to swap 3M for Honeywell, but Honeywell
isn't a bad stock to consider in the industrials/conglomerate space.
Follow this link for the full article:
Honeywell Appears To Have A Lot To Offer
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