Honeywell International (HON)

When Honeywell splits into three companies, owners of Honeywell Canadian Depositary Receipts (CDRs) traded on the TSX will not directly receive shares of the spun-off entities—instead, they will receive special cash distributions for each CDR held, reflecting the value of the spinoff securities, such as shares in the new Solstice Advanced Materials Inc. For example, as part of the 2025-2026 process, CDR holders will receive a cash amount approximately equivalent to the value of the distributed shares (such as one Solstice share for every four Honeywell shares) rather than being granted CDRs in the new entities themselves. Generally speaking, such moves are good for shareholders. The company is splitting to create value. That being said, many investors simply sell their news shares, causing some price pressure on the spin outs. In this case, considering current valuation, we would be OK buying, but we would not expect miracles here. Gains can take a while, and near year end some large investors may wait before accumulating positions in the the new entities.
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Very good company, but it's always a matter of valuation with this one. Reasonably priced (though not incredibly cheap) on his expectations of future earnings growth. Splitting into 3 pieces, and there may be some good opportunities there (looking to GE as an example).

You could hold, but then you run into that tax treatment issue again. You have to be careful. When you're issued new shares, it comes through in the US on a tax-free basis. But Canada often treats it as a dividend, so you're fully taxed on it and it can be quite hurtful.

Very inexpensive at 19x PE. Great businesses under the hood in terms of aerospace and automation. Catalyst for realizing value over the next 2-3 years is the upcoming spinoff. Post-spinoff, valuations will normalize to what's suitable for the growth of each business according to the industry it's in. Yield is 2.31%.

They will spin off a company in advanced materials. This will create in HON a pure-play aerospace company and a building automation company with great tech.  Spinning off Solstice is a bold move (Solstice as an investor day on Wednesday).

Has lagged the market, but has AI exposure in aerospace automation and advanced materials. They supply US defence and cybersecurity. Is still trending higher with 20% upside. Is oversold now.

Very good company. Somewhat expensive against historical multiples, but that can be said about a lot of industrials. Sector's done extremely well, so that means there's lots of choice. This one doesn't make his team.

So many moving pieces in the puzzle. 12-month price target of $253, decent runway. Activist Elliott Management has forced a breakup. People get concerned about spinoffs, but thinks it will be fine. Biggest division will be aerospace -- sort of cyclical. Second is automation -- in renewables and so on. 

Third division, Advanced Materials, encompasses AI. Pretty small, as only 3-4% of revenues go there. Just announced it's now largest shareholder in Quantinuum, with second-largest being NVDA. Makes it a significant player in quantum computing. On July 24, beat top and bottom and raised guidance. Yield is 2.13%.

Interesting here. Long-term chart is favourable. Trading around 50-day MA, and moving averages are moving higher. A split would be very favourable. These companies set up their spinoffs for success. Likes industrials. Diverse company with interesting components. He'd be comfortable owning this one.

The chart is positive, upwards and has broken out to new highs. Higher highs and higher lows. Good technicals. Is enjoying the benefits Trump's big bill, at least the market's reaction to it.

It was upgraded today. The sum of the parts will be far greater when they break up HON later. A perpetual compounder that you can own long term.

HON is a different conversation. Decades ago, we went through the big industrial conglomerate phase. Now we're in the specialization phase. The segments are already functioning well; it doesn't need the overhaul that GE was desperate for.

The company and CEO are doing everything right, but shares are highly undervalued.

He owns a lot. Their growth is in aerospace. Nobody wants Boeing, so they'll buy HON. He also likes their chemicals business, though it isn't growth. Their automation is a work in progress.

Announced spinoffs. Lots of costs involved in decentralizing. Quarterly results and guidance were weak. Too early to enter. Not sure she'd want to own all the resulting parts. Needs more visibility.

Special situation. Industrial conglomerate with 2 phenomenal businesses, aerospace and automation. Over the next year will split into 2 separate companies, each with its own capital allocation framework; potential to unlock a lot of value of between 50-100%. 

Trades ~20x PE, really good upside. He'd say to hold both those businesses once they come into being next year. Yield is 2.2%.