Investment Thesis for Honeywell International, Inc. (NYSE: HON)

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Date
2016-06
Journal Title
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Volume Title
Publisher
Institute for Applied Economics, Global Health, and the Study of Business Enterprise
Abstract
This working paper is an in-depth analysis of Honeywell International Inc. Our analysis examines the economic factors that impact Honeywell’s underlying business and how Honeywell has adapted to these ever-changing factors. This economic analysis is then combined with our proprietary, Hanke-Guttridge Discounted Cash Flow (HG-DCF) model to determine Honeywell’s financial position. The HG-DCF model will be presented along-side Monte-Carlo simulations to reveal the distribution of probable free cash flows and the likelihood of future earnings. In addition to these quantitative factors, we also examine the compensation plans of Honeywell’s executives to assess alignment with shareholders. At the conclusion of this analysis, it is our intention for readers to understand Honeywell’s business plan and the company’s financial standing to arrive at a sound investment decision.
Description
The Studies in Applied Finance series is under the general direction of Professor Steve H. Hanke (hanke@jhu.edu), Co-Director of The Johns Hopkins Institute for Applied Economics, Global Health, and the Study of Business Enterprise and Dr. Hesam Motlagh (hnekoor1@jhu.edu), a Fellow at The Johns Hopkins Institute for Applied Economics, Global Health, and the Study of Business Enterprise. This working paper is one in a series on applied financial economics, which focuses on company valuations. The authors are mainly students at the Johns Hopkins University in Baltimore who have conducted their work at the Institute as undergraduate researchers.
Keywords
investment thesis, finance, Honeywell International, financial modeling, discounted cash flow, free cash flow, Monte-Carlo simulation, management compensation
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