Prediction: Buying Honeywell Stock Today Will Set You Up for Life
Investors may buy stocks for any number of reasons, but when it comes to Honeywell International (NASDAQ: HON), there's one reason in particular that looks like a good argument for adding it to your portfolio now. However, it might not be the one many investors expect as the conglomerate moves toward a breakup into three separate companies.The best way to put it is this: Honeywell stock is a good buy not for what the company is now, but for what it could become. This distinction speaks to the two highly complementary arguments for viewing the stock favorably. The "sum of the parts" argument does not offer as strong a buy case as many might believe. As I've written about in more detail previously, Honeywell's aerospace and automation businesses do look undervalued compared to their peers -- but they also are not quite as strong as their peers. Honeywell Aerospace's position in business jet engines, avionics, auxiliary power units, and actuated systems is less powerful than GE Aerospace's dominant position in commercial airplane engines, for example.Continue reading
Investors may buy stocks for any number of reasons, but when it comes to Honeywell International (NASDAQ: HON), there's one reason in particular that looks like a good argument for adding it to your portfolio now. However, it might not be the one many investors expect as the conglomerate moves toward a breakup into three separate companies.
The best way to put it is this: Honeywell stock is a good buy not for what the company is now, but for what it could become. This distinction speaks to the two highly complementary arguments for viewing the stock favorably.
The "sum of the parts" argument does not offer as strong a buy case as many might believe. As I've written about in more detail previously, Honeywell's aerospace and automation businesses do look undervalued compared to their peers -- but they also are not quite as strong as their peers. Honeywell Aerospace's position in business jet engines, avionics, auxiliary power units, and actuated systems is less powerful than GE Aerospace's dominant position in commercial airplane engines, for example.
