We recently published a list of 12 Best Automation Stocks To Buy According to Hedge Funds. In this article, we are going to take a look at where Honeywell International Inc. (NASDAQ:HON) stands against other best automation stocks to buy according to hedge funds.
The rise of generative AI has skyrocketed automation, while robotics are disrupting industrial automation. On the other hand, supply chain automation has reshaped traditional operations from removing warehousing bottlenecks to inventory management, and demand forecasting. In inventory tracking, advanced warehouse management networks, powered by AI and ML algorithms, assist in optimizing inventory placement, resource allocation, route planning, and more.
Robotics a Key Segment to Automation
Professional service robot sales soared by 30% in 2023, according to the International Federation of Robotics (IFR). IFR’s statistics department data shows that over 205,000 robotics units were sold in 2023, with Asia-Pacific accounting for 80% of global robotics sales. Transportation and logistics service robots sales accounted for 113,000 units in 2023, a rise of 35% from 2022. In addition to that, Medical robots are in huge demand, and medical robot sales soared by 36% to nearly 6,100 units in 2023.
Apart from robotics, quantum computing is revolutionizing various industries. Other technologies including virtual reality (VR), augmented reality (AR), big data, data analytics, and 5G technology are key to driving automation across various segments.
Global X Robotics & Artificial Intelligence ETF (NASDAQ:BOTZ) and Robo Global Robotics and Automation Index ETF (NYSE:ROBO) have surged more than 11% and 8.50% over the last year, respectively. Considering the growing demand for automation systems and robotics, automation stocks hold much promise.
Our Methodology
We used automation and robotics ETFs along with online rankings to shortlist an initial list of automation stocks. We then selected the 12 automation stocks that were the most widely held by hedge funds. The list is sorted in ascending order of the number of hedge fund holders, as of Q3 2024.
Why do we care about what hedge funds do? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
A shot of a commercial plane with a blur of color in the background, representing the production of auxiliary power units in the Safety and Productivity Solutions segment.
Honeywell International Inc. (NASDAQ:HON)
No. of Hedge Fund Holders: 55
Honeywell International Inc. (NASDAQ:HON) is a leading name in process and warehouse automation. The company provides automation services to a wide range of industries, including e-commerce, life science, metals and mining, petrochemicals, and oil and gas industries.
Honeywell International Inc. (NASDAQ:HON) is currently facing pressure from activist investor Elliott Management as the company has missed quarterly forecasts due to supply chain disruptions. After Elliott Management took the largest stake worth $5 billion in HON in November 2024, the investor has suggested splitting into two separate entities: Honeywell Aerospace and Honeywell Automation.
Honeywell International Inc. (NASDAQ:HON) confirmed on Thursday that its board has completed the portfolio evaluation related to the separation and plans to separate its Automation and Aerospace Technologies businesses into two distinct publicly traded companies. The company will also spin off its Advanced Materials business into a separate publicly traded company, according to the plan announced in October 2024. The separation will be tax-free to the company’s shareholders and is expected to be completed by the second half of 2026.
Overall, HON ranks 4th on our list of best automation stocks to buy according to hedge funds. While we acknowledge the potential of HON to grow, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than HON but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
