What Makes Honeywell (HON) a Good Investment?
Madison Investments, an investment advisor, released its fourth-quarter 2025 investor letter for the “Madison Large Cap Fund”. A copy of the letter can be downloaded here. In the fourth quarter, the S&P 500 returned 2.65%, resulting in a full-year return of 17.9% for 2025. Over the last three years, the Index has achieved annual growth of over 21%. Following the recent trends, market leadership was defined by High Beta and Momentum factors, with narrow participation. However, in the fourth quarter, the market saw slight improvements in previously lagging sectors like Healthcare, Financials, and Consumer Discretionary. Still, mega-cap technology companies remained the primary drivers of the S&P 500's overall return, indicating high stock concentration. Against this backdrop, the Madison Large Cap Fund (Class I) appreciated 3.43% compared to the S&P 500 Index’s 2.65% return. In addition, please check the Fund’s top five holdings to know its best picks in 2025.
In its fourth-quarter 2025 investor letter, Madison Large Cap Fund highlighted stocks like Honeywell International Inc. (NASDAQ:HON). Honeywell International Inc. (NASDAQ:HON) is an American multinational company that engages in aerospace technology, industrial automation, building automation, and energy and sustainable solutions businesses. On February 24, 2026, Honeywell International Inc. (NASDAQ:HON) stock closed at $243.61 per share. One-month return of Honeywell International Inc. (NASDAQ:HON) was 12.45%, and its shares gained 22.35% over the past 52 weeks. Honeywell International Inc. (NASDAQ:HON) has a market capitalization of about $164.16 billion.
Madison Large Cap Fund stated the following regarding Honeywell International Inc. (NASDAQ:HON) in its fourth quarter 2025 investor letter:
"It was an active quarter for the portfolio. We initiated positions in Workday and Honeywell International Inc. (NASDAQ:HON). The second new investment was in Honeywell, a high-quality industrial conglomerate. Currently, the company is undergoing a portfolio transformation with the sale and spin off of a variety of assets in 2025 and the anticipated separation of the aerospace and automation businesses in the second half of 2026. We believe this separation will further enhance the return on invested capital and growth opportunities for each business, and that Honeywell’s portfolio transformation is underappreciated by equity investors."
Honeywell International Inc. (NASDAQ:HON) is not on our list of 30 Most Popular Stocks Among Hedge Funds. According to our database, 79 hedge fund portfolios held Honeywell International Inc. (NASDAQ:HON) at the end of the fourth quarter, up from 76 in the previous quarter. While we acknowledge the potential of Honeywell International Inc. (NASDAQ:HON) as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on thebest short-term AI stock.
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