Honeywell International Inc. (HON), The Boeing Company (BA): Windy City Hedge Fund’s Top Plays for 2013

While we do not know the exact dates of these bullish transactions, we can say that both companies have seen their stock prices appreciate by double-digits since the start of Q4—Eaton by 30.9% and Boeing by 10.5%. Each also saw aggregate hedge fund interest increase by an average of 10% over this period.

Boeing offers a little better value opportunity than Eaton, as its consistently booming backlog and an improving airline industry gives the aerospace company strong growth prospects moving forward. Boeing shares sport a PEG of 1.4, while analysts’ average estimates indicate that EPS growth of 10-11% a year is expected over the next half-decade.

Eaton, meanwhile, is fresh off its acquisition of Cooper Industries completed late last year, which partially explains investors’ optimism. The sell-side predicts EPS growth of almost 19% next year, with long range growth settling in around 9% annually, but shares do trade at a PEG of 1.9. Given its rapid appreciation over the past few months, it may be best to wait for a more attractive entry point to mimic Parekh and Alyeska on Eaton.

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