Bleak Short-Term Outlook Overshadows Long-Term Value: Johnson Controls, Inc. (JCI), Honeywell International Inc. (HON), United Technologies Corporation (UTX)

Page 1 of 2

It’s hard to find undervalued companies in this overheated market, but there are still a few stocks suffering from an undue discount due to short-term worries.

Johnson Controls, Inc. (NYSE:JCI) is a leading auto-parts supplier that is attempting to diversify its operations away from the cyclical auto industry. The company is trying to sell one of its automotive businesses, but the near-term outlook for the business as a whole is not great.

Honeywell International Inc. (NYSE:HON)

However, with several market-leading product lines, the company is in a position to achieve long-term success.

Market Leader

Although Johnson Controls, Inc. (NYSE:JCI) is heavily involved in the automotive interiors marketplace, it also has operations in HVAC systems and vehicle batteries.

The company is by far the largest HVAC service provider in the country — nearly three times the size of the next-largest competitor. This allows for superior economies of scale that give the company a competitive advantage.

In addition, the company’s start-stop batteries are considered the market leader in an industry poised for growth. Management has also made a large bet on lithium ion batteries — an investment that has yet to play out.

Most importantly, Johnson Controls has a strong balance sheet, which provides it some protection in the case of another downturn in the auto market. However, a sale of the automotive interiors business would go a long way toward reducing this cyclical imperative.

Competition

While Johnson Controls is trying to diversify into other areas, it will continue to face competition on all fronts. Honeywell International Inc. (NYSE:HON) is involved in the automotive transportation industry, but has successfully diversified into aerospace and other areas. The company is a major supplier of systems for the Airbus A350 and is a leading company in the aerospace systems market.

Page 1 of 2
blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months Click to see monthly returns in table format!

Lists

5 Retirement Mistakes To Avoid (and Einstein’s Famous Quote)

11 Smartest People in the World

6 Films About the Financial World You Need To Watch (While “The Wolf” is Not Around)

Warren Buffett and Billionaires Are Crazy About These 7 Stocks

The Top 10 States With Fastest Internet Speeds

10 Best Places to Visit in USA in August

Top 10 Cities to Visit Before You Die

Top 10 Genetically Modified Food In the US

15 Highest Grossing Movies Opening Weekend

5 Best Poker Books For Beginners

10 Strategies Hedge Funds Use to Make Huge Returns

Top 10 Fast Food Franchises to Buy

10 Best Places to Visit in Canada

Best Summer Jobs for Teachers

10 Youngest Hedge Fund Billionaires

Top 10 One Hit Wonders of the 90s

Fastest Growing Cities In America

Top 10 U.S. Cities for Freelancers

Top 9 Most Popular Free iPhone Apps

Top 10 Least Expensive Private Business Schools in the US

Top 15 Most Expensive Countries in the World – 2014

Top Businesses to Invest In

Top 5 Things You Might Be Doing Wrong With Your Business

Top 5 Strategic Technology Trends in 2014

Top Rags to Riches Stories

Parenting Behavior That Promotes Future Leaders

Top 5 Mistakes Made by Small Businesses

Top 5 Most Common and Potentially Devastating Financial Blunders

Top 5 Highest Paying Jobs for Web Designers

Top 6 Most Respected Professions that Also Pay Well

Top 5 Pitfalls Investors Should Avoid

Top 6 Lawyers and Policy Makers Under 30

Top 6 New Year’s Resolutions for Entrepreneurs

Top 7 Locations to Check in on Facebook

Top 5 Mistakes made by Rookie eBay Sellers

Top 7 eBook Publishers in 2013

Top 6 Health Industry Trends in 2014

5 Lessons for Entrepreneurs from Seth Godin

Top 5 Success Tips from Jordan Belfort – the Wolf of Wall Street

Best Master’s in Finance Degree Programs

Top 6 Earning Celebrities Over 50

The most expensive sports to play

Top 7 Earning Celebrities Under 25

Best 7 Online Courses to Take: Free Finance MOOCs

Top 6 Bad Habits that Promote Failure

20 Most Valuable Soccer Teams in the World in 2013

12 Most Expensive Countries for Foreign Students

Top 30 Most Influential Women in the World

Top 20 Most Expensive New Year Eve Shows

Top 5 Best Vocational Careers

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!