Investment "Logic"

On October 19, Honeywell announced their third quarter earnings results and they were fantastic.  Earnings came in at $2.03, beating out the $1.99 estimates while revenues came in at $10.76B which just edged expectations of $10.75B.  Organic sales came in at 7% which was the very high end of the anticipated range while margin expansion exceeded their range by 20 basis points on a 50 basis point high end.  On top of that, the company exceeded the guided amount of capital returned to shareholders via buybacks by $1.5B on a $3B guidance.  Hopefully, the company was buying back shares towards the end of the quarter when the stock was getting hit its hardest, but if it was, we certainly haven't seen it in the stock prices since - outside of the fact that they may not be in a window in which they can buy back shares now, resulting in less of a floor of protection for the stock.   All segments performed well for the company with SPS and Aero leading the way ...

Yesterday, I received a small number of shares of Honeywell spinoff Rezidio as a part of the spin-off process.  I have decided to sell the entire position at a price of $25.51.  While I expect the company to perform well long-term, in the short-term this is a declining sector given the slowdown we've seen in home building and company investments.  I anticipate the company to have to deal with this pressure over the next several quarters as a result and do not expect the stock to perform well.  One thing that I do see as an interesting opportunity for this company is what happens with the United Technologies/Rockwell Collins merger.  Should China decide to let this deal happen, United Technologies will likely split itself into 3 companies which will also include a home/HVAC space that I can see merging or being bought by Rezidio in the future.  That said, I don't think the homework effort is worth the small number of shares I will have in the company as ...

Back on April 20, Honeywell announced the results of their first quarter operations.  Results were strong, with earnings coming in a $1.95 and sales coming in at $10.4B - both of which were beats against expectations of $1.90 and $10.02B respectively.  Organic sales also beat guidance of 2% - 4%, by resulting in 5% along with 40 basis points of margin expansion and $1B of cash flow.  Additionally, the company spent $1.4B in share repurchases ($950M) and dividends since there weren't ideal investment opportunities to go after.  Growth was led by the aerospace division with 8% organic growth along with 6% organic growth from the Safety and Productivity solutions division.  Home and Business Technologies and Performance Materials and Technologies grew 2% and 3% organically, respectively.   Results were strong enough that the company raised EPS guidance to a range of $7.85 - $8.05, raising both the lower and upper ends.  They anticipate organic...

Oh how the times change so easily.  It's become apparent that the stock market of 2017 is gone and what has taken its place is one filled with uncertainty and volatility.  Repeatedly over the last number of weeks we face wild swings as our President tweets, aids calm fears, and new complications arise.  It's important to note that for the last month and a half, we've truly been in the grips of a macro environment where everything from Presidential Tweets, Fed statements, Jobs reports, and other extraneous political and macroeconomic news controls the markets.  The one thing that could potentially put some calm to the market - earnings season - only started on Friday and despite what was a strong showing out of our biggest banks, what started as strong gains were wiped out and met with losses as people got prepared for a weekend which included fears of us dropping missiles on Syria (it happened Friday night and then called a "complete success"), as well as fea...

Once again, it's been awhile since I've provided an update or completed missing quarterly reviews.  Time to put in some extra work and get caught up.  To start out with, my portfolio has been under performing the S&P 500 this year.  As of today, I'm just over 2% behind the S&P 500.  I'm finding this to be quite frustrating and am trying to figure out what/how/why that is the case after last year's over performance.  I have yet to figure out the solution, as many of these companies are still just as great as they always have been, but they've been out of favor in the market for the last couple months.  This is potentially a temporary thing and a test to my conviction in the holdings. That said, there are other factors to consider as well.  The US Dollar has leveled off and shown a little strength with the rise of interest rates and lack of similar actions in other reasons, for example.  And to top that off, Trump just elected Larry K...

On Friday, Honeywell announced results for fourth quarter and fiscal year 2017.  As expected, results were mostly spectacular.  Earnings came in at $1.85 on organic sales of 6%.  Revenues were $10.8B while delivering free cash flow (FCF) of 123%.  They repurchased 10.3M shares and also increased the dividend by 12% during the quarter.  These results mostly topped analyst expectations where earnings beat by a penny and revenues beat by around $90M.  Many analysts were hoping for 7% organic growth, though, which was the one bad mark for the company.  That said, the company projected only 2% - 4% organic growth, so they well exceeded their own expectations.  It is important to note that after all of these numbers, the company did report a loss of $3.8B due to provisions for U.S. Tax reform.  But these same reforms also allowed the company to adjust earnings guidance for 2018 up to $7.75 - $8.00, which is in line with my personal estimates of...

New year and it's time to get going on new weekly updates and a new batch of quarterly earnings reports.  Now that I've got the past year's review behind me, now it's time to start listening to fourth quarter and 2017 yearly earnings results.  We start on Tuesday when Citigroup announces their fourth quarter results.  Today, JP Morgan and Wells Fargo both reported.  There were significant tax losses and the trading divisions suffered because of low volatility.  There were also a fair amount of one-time charges,  which were expected to take advantage of tax loss benefits and other similar related events.  In general, the report was good for an institutional bank. NIM was higher and the forward outlook was postie, and with it, the bank stocks took off.  The markets will be closed on Monday for Martin Luther King Day, so Citi will be the next big bank report and I expect that we'll get another similar report and stock price results.  More s...