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Honeywell 'Really Good' but Not Yet a Buy to Jim Cramer

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Honeywell HON has shown signs of life since it touched a 52-week low in March, but the Action Alerts PLUS charitable trust isn't ready to start buying just yet. 

Jim Cramer and Jeff Marks were talking about the Charlotte specialist in automotive and aerospace technology and products. Jim put the question to the AAP senior portfolio analyst:

"We both feel that Honeywell's really good. We know we left it as part of a belief that the economy was rolling over and there was very little hope. At what price do you want to buy Honeywell back?"

The stock has taken investors for a ride in 2020, touching a year high above $184 in January, dropping to a year low above $101 in late March, and then struggling to its current position, about halfway back to that year high.

Marks responded that Honeywell has "the best balance sheet out of the entire industrial sector. They can pay that div; they could probably increase it, too. ...  

"My issue with Honeywell is ... its aerospace exposure. The market had a nice run into that rotation over the last couple of weeks. And we saw airlines kind of lead the charge, Boeing leads the charge, but I don't know what that recovery looks like. ...

"I am looking for a little bit more weakness in Honeywell. ... If you could get more towards a 2 1/2, 2 3/4, all the way to 3% yield, I think that would be very tempting. ...

"I wouldn't be surprised if Honeywell made an acquisition to ... diversify their revenue streams more, away from aerospace. And they have the balance sheet to do it. 

"I definitely have my eye on it and it's interesting, but I think a little bit more weakness, considering we just don't know what that aerospace recovery looks like."

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