The tariff whipsaw in markets may be past the worst of the pain, but it’s not over yet. However, there’s a clear sign that many companies will be increasing their domestic manufacturing to avoid the dangers of rapid change in tariff policies.
That could bode well for many American manufacturers, particularly those who produce higher-end technologies. And owning shares of these companies could lead to outperformance as they see higher growth.
That includes industrial giant Honeywell (HON). The industrial conglomerate has a variety of products, and its industrial automation tools can help other companies increase their production in the United States.
Honeywell has been a steady performer, with revenues up 7% in the past year, and sporting a 15% profit margin, on the higher end for manufacturing-related industries. Plus, shares are still a reasonable value here at 18 times forward earnings.
Action to take: Long-term investors may want to scale into Honeywell in the low $200 range, and use any further market fears to add to the position at a lower price. Shares have been rangebound over the past five years but could break higher amid increased industrialization.
Honeywell currently pays a 2.4% dividend at current prices.
For traders, the September $230 calls, last trading for about $3.40, could see mid-double-digit returns or higher in the months ahead.
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 company mentioned in this article.