HON bought Germany based Elster, Inc recently for $ 5.1 billion
Elster is in the ''smart metering'' business, mostly for natural gas & water/fluids.
Elster revenues last year were $ 1.8 billion
HON said it paid ''12.6 times core earnings'' for Elster, so this firm generates approx
$ 400 million of ''core earnings'' annually.
This Elster acquisition is the largest purchase by Dave Cote and its also the largest
since HON bought Allied Signal in 1999. HON released a plan in 2014 saying it plans
to dedicate $ 10 billion in capital for acquisitions, so this transaction uses about half
of HON's buying war-chest.
I have read that ''smart metering'' is a growth industry as water and energy monitoring
get more important. But is a $ 10 billion global metering business large enough to
impact HON's financials in a meaningful way....? Maybe HON needs to dedicate more
capital to this potential metering emerging frontier, if its truly a future grower...?
If HON really thinks metering is a viable business, the WSJ said they need to buy a US
and maybe a Latin America metering firm(s) as well. To me that seems like HON
will need to spend more than $ 10 billion total to build out this global metering platform.
I approve of Cote using capital to enter new growing businesses. IMO its much better
than ill timed buybacks, when stock price are high and costs of capital are so low.
I hope Cote and his team have extensively and accurately done their due diligence
that the global ''smart metering'' industry is for real when it comes to future revenue
and profit growth, worldwide. Time will tell.
If Cote bought one ''smart metering'' firm in Europe then he needs to buy other
metering firms to round out the strategy. HON needs to move the needle.
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Agreed. This is not the sign of a growing company. Cutting costs to get higher EPS will have a point of deminishing returns. Where are new products, etc.?
Hon continues to do a good job taking cost out and driving value for the investors, but can they deliver any revenue growth? We have heard about new products from this management team for the past several quarters, but it doesn't seem to be doing anything for organic growth. This has been a nice stock for awhile now, but I'm not sure how much longer they can cut their way to profitability.
On a down day, the day before earnings, after hours trading has lifted HON up over 2.5%?
Yahoo won't let me post my conclusions to that.
Let's try again without them.
Sara... as a UOP and Honeywell Retiree (and an owner of mucho stock) I would like to thank you for your timely response! All the best.
I think you have to connect the dots as to how our markets react
Greece bank failures affect EU banks and they affect US banks.
Whatever happens will have some consequence to the value of the US dollar in relationship to other currencies... if the dollar gets stronger then companies such as Hon ad GE continue to suffer.
I've been saying for three year to let Greece fail.
I don't see Greece by themselves as being a problem, but when they drag down the other world markets, that is a problem.
Germany was down by 3.6% with most of the other EU member countries down by a slightly lesser amount.
After stealing the reserves from their own banks to cover past loans, we may see bank failures on a large scale.
Today, Financials took the largest hit in the market.
At one time Visa was down today by 4.4%
Let Greece go their own way and start concerning yourself with China, Italy, Spain and Puerto Rico as those most likely to disrupt the markets next AND for an extended period of time.
The protestors in the streets of Athens made it clear today that they do not accept the proposals demanded by the IMF or Eurozone members. Expect the referendum to fail. Wait until those pension checks dry-up
Today Greece was again downgraded....How do you downgrade below its current rating of junk?
One of my many concerns deals with the tens of thousands of migrants which fled into Greece and Italy over the past year. Terrorist seems to love jumping into environments of unrest...and ISIS did say they planned to hit Rome.
I saw a news interview today were a US official said he would not be surprised if this time next week the news would be discussing a terrorist attack which happened this weekend, not very comforting!
Obama said today that he will not bailout PR....lot of investment there from US
Earlier I noticed that everyone of the DOW components was in the red today
Hope I am wrong, but expect Hon to dip below $100/share yet this week.
Just stirring the pot. Definitely would not buy in current environment. Good time to have handful of cash to put to work after bottom forms. Still don't know which way the Greece thing will go - at least in the short term. May take two weeks to sort out depending on referendum results.
September rate increase could move down the road some but they are anxious to get it done soon. They do need to increase rates if only to be able to lower them for next crisis that may come sooner rather than later!
augie the gasman
I assume you are joking
I would not be buying anything currently since the market has not found a bottom
China's lowering of their interest rate did not help them out of their ongoing dive
PR has now announced that it can not pay the $76B they owe
and Greece is a disaster which will likely suck other EU members down with it
PR loans mainly are funded by the US---not good
Since the earnings period ended, the markets have jumped up and down nearly every other day in speculation over world debt, mainly Greece, however we now see countries other than Greece which may continue to rock the markets for months to come
DOW just dipped into the 17,6 range and default is scheduled for tomorrow ...another bad day?
Buy the one that GE will be bidding on after they complete the sale of most all of their finance businesses for a total of more than $100B..