Honeywell International Inc. (HON): Hedge Funds Remain Cautious

Judging by the fact that Honeywell International Inc. (NYSE:HON) has experienced declining sentiment from the smart money, logic holds that there exists a select few money managers who sold off their entire stakes in the third quarter. Intriguingly, First Eagle Investment Management said goodbye to the largest position of all the hedgies tracked by Insider Monkey, worth close to $146.3 million in stock. Dmitry Balyasny’s fund, Balyasny Asset Management, also cut its stock, about $48.8 million worth. These bearish behaviors are important to note, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).

Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Honeywell International Inc. (NYSE:HON) but similarly valued. These stocks are Royal Bank of Canada (USA) (NYSE:RY), Ambev SA (ADR) (NYSE:ABEV), China Petroleum & Chemical Corp (ADR) (NYSE:SNP), and Eli Lilly & Co. (NYSE:LLY). This group of stocks’ market caps resemble HON’s market cap.

As you can see these stocks had an average of 25 hedge funds with bullish positions and the average amount invested in these stocks was $952 million. That figure was $1.61 billion in HON’s case. Eli Lilly & Co. (NYSE:LLY) is the most popular stock in this table. On the other hand China Petroleum & Chemical Corp (ADR) (NYSE:SNP) is the least popular one with only 11 bullish hedge fund positions. Honeywell International Inc. (NYSE:HON) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard LLY might be a better candidate to consider a long position in.

Disclosure: None