This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

HON: Honey of a Deal?

Stocks in this article: HON

Honeywell (HON) is a diversified technology and manufacturing company that does business on a worldwide scale. HON continues to deliver earnings as well as excellent growth, in spite of these tough economic times.

HON is on track to produce 20% growth in earnings per share in the current quarter as well as 33% growth for fiscal 2011! Thus, fundamentally speaking, HON is about as well run a corporation as possible today.

HON is trading about $7 below its 2011 high of just over $62, that level made in early May. Trading at a price earnings multiple of 16 while growing its earnings at 20% or more offers a speculative opportunity in the options of HON should it continue on its retracement path of attempting to match or exceed that high set back in May.

Let's review the T3/OP video with Jill and Scott. Although they are not as bullish in the short term as I am, the thesis for the trade is in agreement with the collective analysis:



Consider a bullishly biased vertical call spread in HON, expiring in January. This trade is one with medium risk because the total risk is controlled. This trade has medium reward potential because of the fact that it is a hedged trade which caps the potential reward.

Trades: Buy to open 4 HON January 55 calls for $2.25 and sell to open 3 HON January 60 calls at $0.50.

The total risk for the spread is premium paid, or $1.75.

OptionsProfits can be followed on Twitter at twitter.com/OptionsProfits.

At the time of publication, Skip Raschke, Jill Malandrino and Scott Redler held no positions in the stocks or issues mentioned.

Check Out Our Best Services for Investors

Action Alerts PLUS

Jim Cramer and Stephanie Link reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

Jim Cramer's protégé, David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
Try it NOW
Try it NOW
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

Jim Cramer's protégé, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,325.56 -353.14 -2.00%
S&P 500 2,030.90 -26.19 -1.27%
NASDAQ 4,693.6510 -78.1120 -1.64%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters