Honeywell: 3Q25 and Sell Notice

Honeywell reported third quarter earnings before market open today. They posted really strong organic growth in the Aerospace Tech unit and I think that's the primary reason for the ~7.50% gain today. In my 3 quarters owning Honeywell, it seems like that's all that people really care about. Aerospace was great in 1Q, mediocre in 2Q, and great in 3Q and this has corresponded with the performance of the stock.

Sell-side seems to be asking a lot about the margin profile as well, which I know less about. Our model was annuals only and so quarter-to-quarter margin movements aren't something I've been privy to.

I've sold the 2% Honeywell weight to zero on the news today. I've done this for two reasons:

1. I am making an effort to consolidate fringe positions like this and get closer to that 5-7 position portfolio I've been desiring.

2. I am also not comfortable owning Honeywell, a massive company growing MSD, at 25x. I love the Aerospace unit on a standalone basis but would rather buy this back in a year closer to the spinoff. This might be terrible logic, as it's probably the way the rest of the market is approaching this, but I think the opportunity cost of owning Honeywell in the meantime isn't worth it.

I'll absolutely keep watching the Honeywell story though for education's sake. It'll be interesting to see how the conglomerate discount resolves itself and whether I'm right about the Aerospace spinco being a market darling. I could see myself buying this back again in 9-12 months.