Cramer

This looks like a solid investment

Buy - Price 37.32 on Oct. 27
by Jefferies & Co.

Our 46 target values HON at approximately a market multiple on 2011 EPS of $3.05, a slight premium to the peer group that reflects HON's above-average market positioning. Risks include a more severe global economic slowdown, further reductions in air-traffic levels, and an inability to improve transportation-systems performance. Market cap: $27.9 billion.

I think the public needs to embrace the companies that I highlight in Getting Back to Even: either high-yielders such as Enterprise Products Partners (EPD) and Kinder Morgan Energy Partners (KMP) or the accidental high-yielders such as Honeywell (HON) and VF Corporation (VFC) or the companies that are part of a larger wave of growth such as Apple (AAPL), FLIR Systems (FLIR) and ArcSight (ARST) (the tsunamis of smartphones and homeland security).

Aerospace exposure, conglomerate exposure.

Do you mind if I crow that a big industrial like Illinois Tool Works (ITW - commentary - Trade Now), which has repeatedly cut its outlook, raises it today, or that I expect similar reforecasts from Action Alerts PLUS charitable trust names Johnson Controls (JCI), Cooper Industries (CBE), Emerson (EMR) and Honeywell (HON), and perhaps from Parker Hannifen (PH) and Eaton (ETN) on the heels of the ITW news?

Buy - Price 37.15 on Sept. 8
by Broadpoint Amtech

HON is a well-diversified, multi-industry company that's positioned to recover as cyclical industrial end-markets bottom out. We believe HON...will gain traction heading into 2011; 41% of HON's market value has been eroded since summer '08, reflecting the global recession. We believe HON's price is factoring in earnings cuts and that now is the time to build a position in the name. The aerospace segment generates almost 50% of the company's total profits, with a key profit driver being the aftermarket mix....HON's other large segment is automation and control solutions, where 50% of sales are derived from a retrofit mix versus new [original-equipment manufacturing]....Total operating margins should trough in '09 at about 12%. HON is trading at 13.2 times price/earnings multiples for '09 and '10 versus its peers at 21.9 times and 17.1 times, respectively. We believe HON's valuation will continue to recover as aftermarket sales stabilize. Market cap: $27.6 billion.

Solid company

Dividend & capital appreciation New aerospace cycle.

With news that Boeing (BA) expects its Dreamliner plane to fly by the end of the year, Cramer offered up a few ancillary plays, including Honeywell(HON), which he owns for his Action Alerts PLUS charitable trust; Alcoa (AA), "a giant maker of fasteners"; and Precision Castparts (PCP), which he said is "almost entirely aerospace."

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