Aristotle Capital Management, LLC, an investment management company, released its “Value Equity Strategy” first quarter 2025 investor letter. A copy of the letter can be downloaded here. The U.S. equity market started the year with a modest decline, with the S&P 500 Index declining 4.27% during the quarter. Conversely, the Bloomberg U.S. Aggregate Bond Index rose 2.78% during the same period. The composite returned 0.78% gross of fees (0.73% net of fees) in the first quarter underperforming the 2.14% return of the Russell 1000 Value Index and outperforming -4.27% return of the S&P 500 Index. In addition, you can check the fund’s top 5 holdings to determine its best picks for 2025.
In its first quarter 2025 investor letter, Aristotle Value Equity Strategy emphasized stocks such as Honeywell International Inc. (NASDAQ:HON). Honeywell International Inc. (NASDAQ:HON) is a multinational industrial corporation that operates in aerospace technologies, industrial automation, building automation, and energy and sustainable solutions businesses. The one-month return of Honeywell International Inc. (NASDAQ:HON) was -4.83%, and its shares gained 5.00% of their value over the last 52 weeks. On April 14, 2025, Honeywell International Inc. (NASDAQ:HON) stock closed at $200.25 per share with a market capitalization of $128.812 billion.
Aristotle Value Equity Strategy stated the following regarding Honeywell International Inc. (NASDAQ:HON) in its Q1 2025 investor letter:
“We first invested in Honeywell International Inc. (NASDAQ:HON), the multinational industrial conglomerate, in the third quarter of 2021. Throughout our ownership period, the company made meaningful progress in its transformation into a modern, innovation-driven enterprise, with a focus on energy efficiency, productivity and connectivity—commonly referred to as the Industrial Internet of Things (IIoT). Supported by a disciplined capital allocation strategy, Honeywell continued to reshape its product portfolio, emphasizing higher-margin, technology enabled offerings, such as aerospace software and industrial automation—catalysts we had previously identified. As one of the last remaining diversified U.S. conglomerates, and following years of pressure from activist investors, Honeywell announced in February its decision to split into three independent, publicly listed companies: Honeywell Automation, Honeywell Aerospace and Advanced Materials. We believe this move has the potential to enhance operational focus and unlock shareholder value, in line with similar breakups by other large conglomerates. However, the process is expected to take time and is not anticipated to be completed until the second half of 2026. Given this long runway and the limited near term visibility, we elected to exit our stake in Honeywell and will continue to monitor the business as further details emerge. We used the proceeds from the sale to fund what we believe is a more attractive investment in Alphabet.”
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Honeywell International Inc. (NASDAQ:HON) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 67 hedge fund portfolios held Honeywell International Inc. (NASDAQ:HON) at the end of the fourth quarter which was 55 in the previous quarter. While we acknowledge the potential of Honeywell International Inc. (NASDAQ:HON) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
In addition, please check out our hedge fund investor letters Q1 2025 page for more investor letters from hedge funds and other leading investors.
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Disclosure: None. This article is originally published at Insider Monkey.