We recently published a list of the 13 Most Undervalued Blue Chip Stocks To Buy According To Analysts. In this article, we are going to take a look at where Honeywell International Inc. (NASDAQ:HON) stands against other most undervalued blue chip stocks to buy according to analysts.
“Now is the Time to Revisit Portfolios”
The Fed went through with a 50 basis point cut and as things have started to get clear, investors must give their portfolio another look. On September 20, Matt Stucky, Northwestern Mutual Wealth Management’s chief equities portfolio manager, appeared in an interview on Yahoo Finance to discuss why and how investors must revisit their portfolios.
He suggested that now is the perfect time for investors to sit down and reassess their investments with the help of advisors. Stucky highlights that there is currently $6.3 trillion sitting in money market funds in the asset class, which may not be as attractive after the 50 basis point cut went through. He urged investors to consider a rather diversified portfolio and suggested that sitting on cash alone is risky.
He reiterated that while investors do not need to alter their long-term strategic goals, the ones with idle cash must try to allocate or deploy that money in other investment classes. According to Stucky, garnering a solid yield or return on investment does not come without risk and investors must understand that with the current Fed decision on board, it is impossible to get that kind of yield from cash alone.
What Does the Cut Signal?
On September 19, Dennis Lockhart, Former president of the Federal Reserve Bank of Atlanta, appeared in an interview on Yahoo Finance to discuss the aftermath of the rate cut. According to Lockhart, the rate cut was perfectly balanced and rather optimistic in nature.
He believes that the Fed’s decision was not reactionary to anything going on in the market or the economy. The Fed is particularly confident about the inflation rate, the labor market, and the soft landing of the economy.
Lockhart suggested that the Fed will reroute and remain flexible based on how the economy is performing from meeting to meeting. According to him, the Fed will aim to maintain flexibility and the 50 basis point cut was more like a compensation to what should have happened in July.
Our Methodology
To come up with the 13 most undervalued blue chip stocks to buy according to analysts we examined multiple similar rankings, our own rankings, and ETFs to come up with the best blue chip stocks. We then chose stocks with a forward P/E ratio that was less than the S&P 500’s (22.68, as of September 22). Finally, we ranked the shortlisted stocks in ascending order of the analyst upside potential, as of September 22, 2024.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
A shot of a commercial plane with a blur of color in the background, representing the production of auxiliary power units in the Safety and Productivity Solutions segment.
Honeywell International Inc. (NASDAQ:HON)
Forward P/E, as of September 22: 20
Analyst Upside Potential, as of September 22: 11%
Number of Hedge Fund Holders: 50
Honeywell International Inc. (NASDAQ:HON) is a leading multinational conglomerate present in multiple industries including aerospace, automation, performance materials and technologies, and safety and productivity solutions.
The company helps organizations solve complex challenges in automation, aviation, and the energy transition for example. Some of its products and services include smart sockets, access controls, actuation systems, air and thermal management systems, fall protection equipment, and first aid supplies to name a few. Over 10 million commercial buildings use Honeywell’s (NASDAQ:HON) technologies to enhance business performance and create more comfortable spaces for employees.
Having stakes in multiple industries does not stop Honeywell International Inc. (NASDAQ:HON) from expanding. In the past few months, the company has not only closed multiple acquisitions in the renewable energy and the air and defense sector, but it has also signed agreements with other tech giants to leverage artificial intelligence and reduce power plant emissions.
Honeywell International Inc. (NASDAQ:HON) is one of the most undervalued blue chip stocks to buy and we say that because of the reliance other companies have on it. The company is set to extremely benefit from the growing demand for automation technologies and AI to enhance workplace productivity and safety.
Overall, HON ranks 13th on our list of most undervalued blue chip stocks to buy according to analysts. While we acknowledge the potential of HON as an investment, our conviction lies in the belief that 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 HON but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.