Wed, 31 May 2017
With a new CEO putting an emphasis on innovation, we think patient, longer-term investors can benefit.
Barbara Noverini: We think that an interesting transition is happening at wide-moat Honeywell currently, which makes this stock one to watch.
In February, new CEO Darius Adamczyk succeeded longtime CEO Dave Cote, who was widely credited with driving profitability improvement throughout Honeywell's portfolio. Margin expansion has indeed been impressive, and we believe that Honeywell has now earned its right to grow.
Adamczyk's vision for the company includes greater emphasis on innovation, which we believe could translate into higher levels of sales and earnings growth as Honeywell focuses on marrying software and services with industrial equipment. Examples of this include connected aircraft, which can monitor the real-time performance of an auxiliary power unit while at the same time providing reliable high-speed internet access to airline passengers. In addition, we see great potential in connected home and building offerings, made possible through smart metering technologies. Intelligent warehouse automation is also on the horizon, with Honeywell's recent acquisitions of Intelligrated and Movilizer.
We're starting to see more examples of high margin incremental revenue growth opportunities like these emerge from Honeywell's portfolio, which we believe will benefit patient, longer-term investors.