Do Hedge Funds and Insiders Love Honeywell International Inc. (HON)?

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Honeywell International Inc. (NYSE:HON) has seen a decrease in enthusiasm from smart money of late.

In the eyes of most investors, hedge funds are seen as worthless, old financial tools of yesteryear. While there are more than 8000 funds in operation at the moment, we choose to focus on the upper echelon of this group, close to 450 funds. It is estimated that this group oversees the lion’s share of the hedge fund industry’s total capital, and by watching their best equity investments, we have unearthed a few investment strategies that have historically outperformed the broader indices. Our small-cap hedge fund strategy outpaced the S&P 500 index by 18 percentage points a year for a decade in our back tests, and since we’ve began to sharing our picks with our subscribers at the end of August 2012, we have outclassed the S&P 500 index by 23.3 percentage points in 8 months (see all of our picks from August).

Just as beneficial, optimistic insider trading activity is another way to parse down the world of equities. Obviously, there are lots of reasons for a corporate insider to get rid of shares of his or her company, but just one, very clear reason why they would initiate a purchase. Plenty of academic studies have demonstrated the valuable potential of this method if shareholders know where to look (learn more here).

Now, it’s important to take a look at the key action regarding Honeywell International Inc. (NYSE:HON).

What does the smart money think about Honeywell International Inc. (NYSE:HON)?

In preparation for this quarter, a total of 30 of the hedge funds we track were bullish in this stock, a change of -9% from the previous quarter. With hedge funds’ positions undergoing their usual ebb and flow, there exists an “upper tier” of key hedge fund managers who were upping their holdings considerably.

Honeywell International Inc. (NYSE:HON)According to our comprehensive database, Adage Capital Management, managed by Phill Gross and Robert Atchinson, holds the largest position in Honeywell International Inc. (NYSE:HON). Adage Capital Management has a $486.2 million position in the stock, comprising 1.6% of its 13F portfolio. Sitting at the No. 2 spot is Mario Gabelli of GAMCO Investors, with a $200.1 million position; 1.3% of its 13F portfolio is allocated to the company. Remaining hedge funds that are bullish include Ken Griffin’s Citadel Investment Group, Jean-Marie Eveillard’s First Eagle Investment Management and Michael Messner’s Seminole Capital (Investment Mgmt).

Seeing as Honeywell International Inc. (NYSE:HON) has witnessed a declination in interest from the smart money, it’s safe to say that there exists a select few funds that elected to cut their entire stakes in Q1. At the top of the heap, Larry Foley and Paul Farrell’s Bronson Point Partners sold off the largest investment of all the hedgies we watch, valued at about $45.4 million in stock., and D. E. Shaw of D E Shaw was right behind this move, as the fund said goodbye to about $10.4 million worth. These transactions are interesting, as total hedge fund interest dropped by 3 funds in Q1.

What have insiders been doing with Honeywell International Inc. (NYSE:HON)?

Insider trading activity, especially when it’s bullish, is particularly usable when the company we’re looking at has seen transactions within the past 180 days. Over the last 180-day time frame, Honeywell International Inc. (NYSE:HON) has experienced zero unique insiders buying, and 9 insider sales (see the details of insider trades here).

Let’s also take a look at hedge fund and insider activity in other stocks similar to Honeywell International Inc. (NYSE:HON). These stocks are Cummins Inc. (NYSE:CMI), Illinois Tool Works Inc. (NYSE:ITW), Koninklijke Philips Electronics NV (ADR) (NYSE:PHG), Siemens AG (ADR) (NYSE:SI), and Danaher Corporation (NYSE:DHR). All of these stocks are in the diversified machinery industry and their market caps resemble HON’s market cap.

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