When I last wrote about Honeywell (HON), I said, "I think there are better risk-adjusted opportunities" in the industrial/multi-industrial space, and indeed there were better near-term performances from names I favored like ITT (ITT) and Johnson Controls (JCI).
Even so, given how poorly Honeywell fits with most of the current "themes", the 12% or so move in the stock since that last piece still isn't too bad. After all, this is a company that isn't really going to benefit from onshoring, it's not really short-cycle-sensitive, and over 50% of its sales are from end-markets (aero, non-resi, oil/gas) that I believe are looking at multi-year recoveries.
Valuation is still in that "okay, but not great" zone where I'd be happy to own it as a long-term holding, but where I'd probably try to hold out for a better entry price for a new position. Honeywell is clearly a well-run company, and its M&A optionality may be underestimated, but it is certainly facing some near-term challenges.
No comments:
Post a Comment