10 Best Autonomous Driving Stocks To Buy According To Short Sellers

4. Honeywell International Inc. (NASDAQ:HON)

Short Interest as % of  Shares Outstanding: 0.85%

Number of Hedge Fund Investors In Q2 2024: 50

Honeywell International Inc. (NASDAQ:HON) is one of the biggest industrial conglomerates in the world. It caters to the needs of the aerospace, construction, pharmaceutical, information technology, and other industries. On the autonomy front, Honeywell International Inc. (NASDAQ:HON) operates in a specific part of the autonomous hardware industry that enables self driving cars to determine their position, orientation, and velocity even when not connected to the Internet. These products are called inertial measurement units (IMUs), and these are already being used by Minnesota based self driving research company VSI Labs. Honeywell International Inc. (NASDAQ:HON) is also aiming to close its $216 million acquisition of an Italian company to further bolster its IMU portfolio. On a broader level, the firm’s different businesses offer it the benefits of diversification. The aerospace sector, which is typically funded through government projects, is resilient to cyclical downturns, which helps Honeywell International Inc. (NASDAQ:HON) to hedge against other sectors such as construction and electronics. The same benefits apply to pharmaceuticals, However, $5.6 billion of Honeywell International Inc. (NASDAQ:HON)’s roughly $9.4 billion in revenue during Q2 2024 came from cyclical businesses, which creates vulnerability for the stock.

This vulnerability was also on the mind of Mar Vista Investment Partners’ Q1 2024 commentary for Honeywell International Inc. (NASDAQ:HON):

“After nearly 14 years of owning shares in Honeywell, we decided to sell our investment during the quarter. This decision was based on a combination of issues that threatened our investment thesis for the company. The main challenges were related to organic growth and capital deployment. Specifically, we have concerns about Honeywell’s future organic growth and its indecisive approach to capital deployment. Even with a strong balance sheet, cash surplus, and low leverage, its capital deployment process lacks direction. Additionally, Honeywell is heavily invested in cyclical and short-cycle businesses which can be volatile. For these reasons, we sold our investment in Honeywell.”