Merion Road Capital Management, an investment advisor, released its Q2 2026 Investor Letter. A copy of the letter can be downloaded here. Merion Road’s long-only large-cap portfolio increased 3.9% in the quarter, with YTD performance remaining flat. Despite underperforming the S&P, the strategy focuses on established industrial companies with strong growth potential and attractive cash flow multiples, avoiding trendy sectors like AI. However, its Merion Road Small Cap Fund excelled, up +16.6% this quarter and over 20% year-to-date, driven by gains from long-term holdings and strong performance from Frequency Electronics, despite some losses from speculative positions and ETF hedges. Please review the Strategy’s top five holdings to gain insights into their key selections for 2026.
In its Q2 2026 investor letter, Merion Road Capital Management highlighted Honeywell Aerospace Inc. (NASDAQ:HONA). Honeywell Aerospace Inc. (NASDAQ:HONA), spun off from Honeywell International in June 2026, manufactures and supplies aircraft components, avionics, engines, and systems. On August 10, 2026, Honeywell Aerospace Inc. (NASDAQ:HONA) closed at $163.09 per share, reflecting a market capitalization of $51.69 billion. Honeywell Aerospace Inc. (NASDAQ:HONA) posted a one‑month return of ‑21.41%.
Merion Road Capital Management stated the following regarding Honeywell Aerospace Inc. (NASDAQ:HONA) in its Q2 2026 investor letter:
“At quarter-end Honeywell completed the separation of its aerospace division. Trading in Honeywell Aerospace Inc. (NASDAQ:HONA) has been lackluster as sell-side analysts have put out uninspiring initiation reports primarily noting the company’s lower growth trajectory in comparison to its peer set. I believe this, along with conservative guidance issued by management, set’s a low bar for the company over the next several years. This conservative guidance is understandable as the team would have little incentive (financially or reputationally) to issue something that they cannot beat. Meanwhile the stock has settled in at a valuation multiple below its peer-set and attractive on an absolute basis. I have been adding this month.”
Honeywell Aerospace Inc. (NASDAQ:HONA) is not on our list of 40 Most Popular Stocks Among Hedge Funds Heading Into 2026. While we acknowledge the risk and potential of Honeywell Aerospace Inc. (NASDAQ:HONA) as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than Honeywell Aerospace Inc. (NASDAQ:HONA) and that has 10,000% upside potential, check out our report about this cheapest AI stock.
In another article, we covered Honeywell Aerospace Inc. (NASDAQ:HONA) and shared Jim Cramer’s views on the company. In addition, please check out our hedge fund investor letters Q2 2026 page for more investor letters from hedge funds and other leading investors.
READ NEXT: 33 Stocks That Should Double in 3 Years and 15 Stocks That Will Make You Rich in 10 Years.
Disclosure: None. This article is originally published at Insider Monkey.
