Turbocharging Honeywell's green investment potential
Rising auto sales could help Honeywell
January 27, 2012
Today on Mad Money, Jim Cramer covered Ford, a company Jim likes, but a company that Jim believes is ahead of itself. Jim suggested that Ford CEO Alan Mulally needs to learn how to better practice UPOD, or under-promising and over-delivering.
Thus, even though US auto sales could rise to as high as 14.5 million units next year, Jim advised staying away from the US automakers as an investment play off rising auto sales.
Instead, Jim suggested that auto suppliers were a better way to play the 2012 rise in car sales. Unfortunately, he didn't suggest any suppliers.
However, I thought I'd see if a little digging could turn up any prospects for further investigation, with a focus on fuel economy and efficiency, a good green investment angle.
Since Jim was focusing on Ford, I thought I'd look into Ecoboost suppliers, since Ford is planning to triple production of Ecoboost vehicles in 2012. Some searching turned up two companies: Bosch, which provides a Y-Pipe Delivery System in EcoBoost engines, and Honeywell, which provides Turbochargers for EcoBoost.
Unfortunately, I wasn't able to find out much about Y-Pipe, so I turned my attention to Honeywell.
Honeywell has a huge turbocharging business, but what really caught my attention as I started my Honeywell search was a just posted Business Week article announcing that Honeywell's forecast for the first quarter of 2012 were going to come up a little short, largely because of the sluggish European economy.
And that got me thinking.
Next year, minimally, the growing US market is going to demand an increase in turbochargers, which should be good news for Honeywell. Likewise, when Europe stabilizes, that will lead to even greater turbocharger demand.
Furthermore, Honeywell is building a $300 million dollar turbocharger manufacturing plant in China.
More interesting, Honeywell is already forecasting a strong 2012, and now that they have a grasp on the problems in Europe, they should be able to use that data in their forecasts.
Therefore, because of emerging market expansion, and a greater use of turbo-chargers in the US, Honeywell has a few headwinds heading into the second quarter and the rest of the year for its turbocharging business, despite the turmoil in Europe.
Obviously, that doesn't make Honeywell a solid green investment, but it does seem worth consideration and further research if you're interested in green investing.
------------------------------------------------------------
Still Looking? Check out the 10 Most Fuel Efficient Vehicles for 2010.
------------------------------------------------------------ |
