Analytical Review of the stocks of Honeywell International Inc.

Analytical Review of the stocks of Honeywell International Inc.

15 April 2016, 21:14
Roberto Jacobs
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Analytical Review of the stocks of Honeywell International Inc.

Honeywell International Inc., #HON [NYSE]
Industrial goods, Diversified production, USA

Financial performance of the company:
Index – S&P 500; Beta – 1.14;
Capitalization – 81.92 В; Return on asset - 10.20%;
Income - 4.77 B; Average volume – 4.27 М;
P/E - 17.63; ATR – 2.59.

Analytical review:

  • The company ranks the third on capitalization in the sector of “Industrial goods” among the issuers traded in the American stock market;
  • Since the beginning of March the rise in company’s chares amounted to 9.5%. It is expected that the rise in price will continue;
  • According to the last report in the fiscal year of 2015 company’s revenue fell by 2.7% to 98 billion USD. However, net profit of Honeywell increased by 12.5% up to 4.77 billion USD in the fiscal year 2015. EPS amounted to 1.53 USD against 1.20 USD a year ago;
  • The company has the highest return on equity and investments among the competitors and in the industry. Return on equity is 15.93%. Return on capital is over 26%. Average rates in the industry are 19% and 4.12% respectively;
  • 79% of the company’s shares belong to Institutional funds. Most of the shares belong to Vanguard Group (5.48%) and Massachusetts Financial Services Co. (4.76%);
  • Currently, company’s shares are traded at the level of 106-107 USD. The majority of large investment funds and banks (Stifel, RBC Capital, Barclays) expect that company’s stocks will rise up to 117-120 USD.


Summary:

  • Company’s report for Q4 of the fiscal year 2015 showed that management of the company is on the right track.
  • Despite pressure from the strong USD company’s net profit has grown. The company has high growth potential.
  • Financial performance of Honeywell has exceeded average performance in the industry. Most part of the company’s stocks belongs to institutional funds. Large investors expect that the price of company’s shares will increase.
  • It is likely that in the near future company’s quotes will go up.


Trading tips for CFD of Honeywell International Inc.

Medium-term trading: the moment the issuer has broken out and consolidated above resistance level of 113.35 USD. After testing and consolidating of the mirrored support level of 113.35 USD in case of the respective confirmation (such as pattern Price Action), we recommend to open long positions. Risk per trade is not more than 2% of the capital. Stop order can be placed slightly below the signal line. Take profit can be placed in parts at the levels of 116.00 USD, 118.50 USD and121.00 USD with the use of trailing stop.


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Short-term trading: on the chart with the timeframe 15M the issuer is traded between the local support and resistance levels of 114.20/114.90 USD. We recommend to enter the market after breakdown and testing of these levels. Positions can be opened at the signal line and the nearest support/resistance levels. Risk per trade is not more than 3% of the capital. Stop order can be placed slightly above/below the signal line. Take profit can be placed in parts of 50%, 30% and 20% with the use of trailing stop.


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The material has been provided by LiteForex - Finance Services Company - www.liteforex.com


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