Buy What the World Needs, Not What the World Wants

In a bull market, all sorts of investment ideas come into play. When there’s a bear market, investors can stay safe but also make money by focusing on companies that provide products and services that customers need.

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  • Defensive stocks don’t have to just be utilities and telecoms. There are a number of other sectors that fit the bill, such as industrial stocks. That space tends to get overlooked.

    One such player is conglomerate Honeywell (HON). The manufacturer of power units, avionics, and advanced systems and software has become a major conglomerate servicing many key technologies behind the scenes.

    Unsurprisingly, the company has fared well over the past year, with the stock up 8 percent amid a market decline. Revenues are up about 6 percent, but earnings are up about 24 percent, a move that the market hasn’t been a huge fan of based on the latest quarterly results. Shares look reasonably priced at about 22 times earnings.

    Action to take: Investors may like shares at or under current prices. Honeywell shares pay a 2 percent dividend right now, and they’ve moved to increase that payout in recent years.

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  • For traders, the June $220 calls, last going for about $5.60, can likely deliver mid-double-digit gains in the coming months.


    Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.