Summary
Honeywell has remained consistent to the vision management laid out for a higher-growth, higher-margin company, and has acquired Transnorm for a little less than $500M.
Transnorm has a strong presence in conveyance systems used to automate warehouses, distribution centers, and other logistics/fulfillment facilities, and particularly in the e-commerce space.
Between growing opportunities in automation and safety, complementary opportunities in refinery catalysts, and the aerospace cycle, Honeywell still looks like an attractive name to hold in the multi-industrial space.
Honeywell (HON) management has made no secret of its game plan for the future, nor its desire to be a leader in markets with above-average potential for revenue growth, margins, and returns on capital. In keeping with that plan, the company has already spun out Garrett Motion (GRX), will be spinning out Resideo, and just announced another promising acquisition for its warehouse automation business.
Between its very strong process automation business, its rapidly-growing warehouse automation business, underrated operations in specialty materials/chemicals and safety, and a solid (if generally well-understood) aerospace business, I find it hard not to like Honeywell. Valuation is not exactly low, but with the company consistently repositioning itself toward higher-growth, higher-margin businesses, and particularly ones where it's establishing strong market share, I continue to like Honeywell as a long-term holding.
