With a hand in everything from aerospace to automation to security systems, Honeywell ( HON) is one of the more diversified names on our list of funds' favorite industrials. While too much transportation exposure was a drag on earnings during the recession, the firm has managed to improve its operations in the years since, increasing margins and climbing revenues back up to pre-recession highs this year. Honeywell is the league leader in the general aviation and regional jet avionics business, leaving outfitting larger commercial aircraft to the likes of GE. By focusing on a single niche, the firm ensures that its avionics systems are more tailored to smaller aircraft, and that pilots are more familiar with Honeywell's systems. Both of those factors should help to drive demand in the years ahead. Even though Honeywell's growth-by-acquisition strategy hasn't been a cheap way to expand the top line, debt remains manageable and the firm has a long track record of paying down debt balances. Last quarter, funds bought 4.7 million shares of this industrial firm. ( Mairs & Power and Fortress Investment Group were both buyers.) Honeywell, one of the top-yielding aerospace and defense stocks, shows up on a list of 5 Picks for 2012 in Aerospace, Defense.