While tech stocks have had a big move higher to start the year, other sectors have lagged. That’s creating a new opportunity. Tech stocks are starting to slow down, and could even pull back. That means that other sectors may be ready to outperform.
In any sector, owning the best names can mean reasonable returns. Those returns can be even better when bought right before an uptrend. And when the best company has plans to grow further.
Things are lining up well for industrial giant Honeywell (HON). The company has struggled with its various operations in recent years, but has been making big strides.
That could mean an end to its underperformance, and a time to head higher.
Shares have been flat over the past year. Earnings and revenues are both up by less than 5%, but could trend higher with new technologies coming online in the coming years.
More importantly, Honeywell has improved its profit margins to 15%, a high level for an industrial firm.
Action to take: Investors may like shares here, with a chance to add to the position on any dip. Honeywell also pays a 2% dividend at current prices, with a history of growing that payout over time.
For traders, the September $230 calls, last trading for about $2.05, could see mid-to-high double-digit returns in the coming months from a trend higher in price.
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.