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Experienced investors know that under the American economic system there are many opportunities but few guarantees. But one thing investors can almost count on: Honeywell International's (HON) shares, which I first wrote about on February 26, 2009 at a price of $26.86, are about to resume heading north. A pull-back in HON has created a second-chance buy-in worthy of consideration. Look for HON's revenue to increase 6-8% in 2010, led by transportation system gains, and a good performance by its automation and control systems unit. (Honeywell makes those round thermostats you see in many homes.)
Further, Honeywell will likely benefit from increased corporate/consumer attention toward improving energy efficiency: The trend is global, and it's only just begun. In short, a stake in HON is a stake in a premiere, industrial operation with a global footprint.
The First Call FY2010/FY2011 EPS estimates for HON are $2.49 to $3.02. Each EPS estimate looks about 5% low, according to my analysis.
Technically, as noted, Honeywell's shares have retreated roughly in-sync with the Dow's Spring pull-back, creating a decent entry point: $41-42.
2010 Outlook: I view Honeywell as a long-term play, but if investors are looking to sell HON within the year, it's probably best to take your profits after it rises to $47-49, if it fails to clear $50.
Stock Analysis: I consider Honeywell International to be a moderate-risk stock. If an investor has already purchased the company's shares, I'd hold them. If not, I'd consider buying a 25% position in HON now; then buy another 25% in one month, if U.S. and global economic conditions don't worsen substantially. Under any circumstance, I wouldn't buy more than 75% of my HON position before August 2010 and I'd put a sell/stop loss at: $28.
Disclosure: Lazzaro has no positions in stocks, but does own shares in two Pimco Bond Funds: PHDAX and PYMAX.
The First Call FY2010/FY2011 EPS estimates for HON are $2.49 to $3.02. Each EPS estimate looks about 5% low, according to my analysis.
Technically, as noted, Honeywell's shares have retreated roughly in-sync with the Dow's Spring pull-back, creating a decent entry point: $41-42.
2010 Outlook: I view Honeywell as a long-term play, but if investors are looking to sell HON within the year, it's probably best to take your profits after it rises to $47-49, if it fails to clear $50.
Stock Analysis: I consider Honeywell International to be a moderate-risk stock. If an investor has already purchased the company's shares, I'd hold them. If not, I'd consider buying a 25% position in HON now; then buy another 25% in one month, if U.S. and global economic conditions don't worsen substantially. Under any circumstance, I wouldn't buy more than 75% of my HON position before August 2010 and I'd put a sell/stop loss at: $28.
Disclosure: Lazzaro has no positions in stocks, but does own shares in two Pimco Bond Funds: PHDAX and PYMAX.
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