Honeywell: Excellent Entry Point

Dec. 05, 2018 5:18 PM ETHoneywell International Inc. (HON)2 Comments


  • The Momentum Growth Quotient for the company is 11.52, which is 20.62% higher than the average for the S&P 100.
  • Shares present a forward rate of return of 11.24% at the current price.
  • ChartMasterPro upward target price of $154.00.
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Shares of Honeywell International Inc (NASDAQ:HON) are down 8.20% since peaking on Oct. 1, 2018, and in my opinion, the shares of this consumer products, engineering, and aerospace conglomerate are an attractive buy at current price levels. The company has a solid history of generating impressive earnings growth, and the future growth ratios point to continued growth over the next twelve months. I lay out my bullish argument for the company below by reviewing some pertinent fundamental and technical aspects of the stock.

Momentum Growth Quotient

My Momentum Growth Quotient (MGQ) plays a critical part when it comes to determining if I am going to go long or short a stock. Generally, I only want to go long a stock with an MGQ higher than that of the S&P 100, and I want to go short a stock with an MGQ lower than that of the index (for a more detailed explanation of how I calculate the MGQ, please see my blog post).

As of the end of October 2018, the MGQ for the S&P 100 was 9.21.

The current MGQ for HON stands at 11.24, which implies a 20.62% higher growth rate compared to the S&P 100. This tells us that HON has strong future growth potential and is a good candidate for a long position.

Financial Snapshot

Let's dig a little deeper into the financial data to get a better feel for how the company has performed on certain fundamental metrics and what these numbers imply for future growth.

Caveat Lector: I am Quant Trader - that is, I seek to understand market behavior by using mathematical and statistical modeling, measurement, and research. So, you won't find much qualitative analysis in my work or in my trading process. The goal is to identify optimum entry points for trades based on my quantitative model and execute those

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ChartMasterPro is a trading service which focuses both on the fundamental and technical analysis of stocks and equity markets. I use a proprietary trading model to trade Call and Put Options on US equities. I've been trading options for 15 years and have made all the trading mistakes that could possibly be made, but as Winston Churchill once said: "Success is the ability to go from one failure to another with no loss of enthusiasm." And by the way, the name is John, John DiCecco. I'm excited to announce that I now offer a MarketPlace service in partnership with SeekingAlpha called The Options Trader - if you like trading options, check it out.

Disclosure: I/we have no positions in any stocks mentioned, but may initiate a long position in HON over the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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