Honeywell International (HON-N)

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%.

Business model has come under pressure, not too many industrial conglomerates left. So much hidden value that can be unlocked over the next 2-3 years. Wonderful aerospace and defense, as well as automation. Separating them makes a lot of sense. Valuation is very attractive. Yield is 2%.

They had a poor quarter. Period.

It's done nothing for a long time. The past CEO was good, but is gone. Isn't crazy about their end markets in a declining economy. It can't break out past $180-200.

ROE is strong and it pays a 2% dividend. A core value holding.

This would drive more value for shareholders. Let's wait and see. Shares were punished yesterday though on profits, but the valuation is good and topline trends are heading in the right direction. Still likes it.

Stock price hovering around 200. Disappointed in share price performance. Believes company needs to take action soon. 

Their airline business is doing well. All capital goods companies fall into periods where they stagnate and need to buy a company and/or make new products.

He just started a position. Everything that Boeing is doing well, aerospace companies like this benefit. Also, they're streamlining their business, starting with aerospace, and can benefit from the infrastructure play. Pays a 2.2% dividend, bug share buybacks and solid dividend growth. He's expecting a breakout after sluggishnes.

Decent, won't hurt you over the long term. He's had success recently with the electrical equipment space, so that's a good place to look on pullbacks.