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Public Markets Investor, Opportunistic Buying & Cost-Basis Management

27 Aug, 15:05Latest

Honeywell Aerospace starts life with heavy spin-off burdens, so it is worth waiting for a better price. It carries $15.85 billion of debt and $800 million of annual interest after sending $15.1 billion to Honeywell, pays $1.125 billion over five years to use the Honeywell name, faces standalone overhead and took on the $375 million Flexjet settlement. After a guidance cut, institutions may shun it through year-end and underwater holders may sell for tax losses. It should still do well long term. x.com x.com x.com

HONA

GURGAVIN

Technology Investor, Event-Driven Trader

20 Apr

HON

Honeywell is still undervalued with its spinoffs coming, including the upcoming aerospace separation. x.com

Mike

Investor, Creator of HiddenSmallCaps

8 May

HON

Honeywell looks like GE 2.0, worth about $265 billion in parts against a $135 billion market cap, with its aerospace spinoff coming in June. The core business is worth about $156 billion at 6.5x its $24 billion of revenue, aerospace about $98 billion at 7x $14 billion, and its 55% Quantinuum stake about $11 billion if Quantinuum is worth around $20 billion. x.com x.com x.com

Pythia Cap

Equity Investing & Market Satire

5 Aug

HONA

Honeywell Aerospace has always been a weak business, with a worse mix than better aerospace names such as HEI, TransDigm, Howmet and GE. With so many good aerospace businesses available, there is little reason to own it. @pitandhummus agrees that, underwritten standalone after the spin-off, it looked overstated relative to much better businesses like GE. x.com x.com

Divergent Capital

Private Investor & Writer, Capital-Light Businesses & Special Situations

23 Mar

HON

Honeywell's breakup should unlock value, because its ~17x blended EV/EBITDA is a conglomerate multiple on aerospace and automation businesses that deserve different valuations. Aerospace spins out with a 27% EBITDA margin, second only to TransDigm among peers, while automation is dragged down by the conglomerate wrapper. At peer-median multiples the parts are worth about $307 a share, roughly 39% above $221.50, with a $187 bear case and $439+ bull case. The June 3 aerospace investor day is key. … Show more

Stephanie Link

Chief Investment Strategist & Portfolio Manager at Hightower, Contributor to CNBC

6 Aug

Boeing, alongside GE, is preferred over the Honeywell Aerospace spin-off because it has more credibility in aerospace. Honeywell Aerospace reiterated guidance two months ago, then missed and cut its organic growth outlook by half, and its management needs time to mature. x.com

Thierry from arvy

CFA, Co-Founder & CIO of arvy, Quality Investing

28 May

HEI

HEICO is a rare compounder because owner-managers with a decentralized culture keep growing niche, FAA-approved aerospace parts. The Mendelson family owns about 20%, and the stock has compounded about 22% a year since 1990. Q2 revenue rose 25% to $1.38B and EPS 49% to $1.66, both beating estimates. Planes fly 30+ years and need parts throughout, in an aerospace market projected to grow from $330B in 2023 to $662B by 2033. The stock is always expensive; low $40s would be a lucky entry. x.com … Show more

Dr. Stoxx

Stock Trader & Author, Oxford DPhil, Trading Education

3 Aug

GE Aerospace is getting a new life as a streamlined jet engine maker, and its chart pattern targets $390. x.com

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