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Author: jammerh Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 533  
Subject: Geraldine Weiss Recommends Honeywell Date: 2/18/2003 1:16 PM
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Geraldine Weiss, of Dividends Don't Lie fame is recommending Honeywell (HON).

If I remember correctly BRK took a position in Honeywell a while back. Anyone recall what WEB paid? I'm guessing somewhere between $25, and $30?

Anyone understand Buffett's thinking here? I try to follow the regional, and business jet market, but am still trying to figure out why he sold off General Dynamics a few years ago. My conclusion was that this company might have been too close since Berkshire's Executive Jet, Fractional Jet-shares company buys many of its jets from GD's Gulfstream.

From my own understanding of Honeywell, the company does seem attractive at these levels. It is well-managed and an employer of the Six Sigma Quality Control Program. However, its fortunes seem inextricably linked to the regional and business jet markets which haven't been getting a lot of fresh orders.

It is not unusual for the business jet market to take a hit when the economy is hurting in general, the hit this time around is exacerbated by the demise of the dot.com/telecom bubbles, and the inherent fallout.

As for the regional jet market, passenger-seat miles are actually up dramatically at most regional airlines, as the majors hand off dropping passenger loads on many routes to their affiliated regional carriers. But those regional carriers already have a large number of orders on the books, and are reluctant to place new orders until they can confirm how much of this new demand will stick around once the economy picks up again.

So Buffett's enthusiasm for Honeywell, as a major supplier to this sector is encouraging in the face of slowing regional jet orders, and an even worse showing in the business jet arena.

War or no war, Honeywell stands to gain from increased emphasis on home security, and defense contracts.

I don't own any shares in HON, but it looks like a great company at a reasonable price. Concerns over pension funding and asbestos liabilities are probably overblown, but I've done no specific research on this particular area.

But the fact that you have a situation where both Buffett, GE's former CEO Jack Welsh, and now Geraldine Weiss, Queen of the Dividend/Growth approach, have all given their nods of approval can't hurt.
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