The Boeing Company (BA), Parker-Hannifin Corporation (PH), Honeywell International Inc. (HON): Are These Companies Poised to Meet Expected Aerospace Demand?

Honeywell looks ready for a boom
As a diversified aerospace technology and manufacturing firm valued at $62.4 billion, Honeywell International Inc. (NYSE:HON) could be ready to take on a surge in the demand for its security, controls, and sensing products. Honeywell International Inc. (NYSE:HON) has raised inventory slightly in the last couple quarters, going from $4.2 billion in the fourth quarter of 2012 to $4.3 billion in the second quarter of 2013. This represents a 1.4% increase, while sales went up by 1.1% during the same period. This shows that the firm is able to handle the current volume of sales while also managing to increase its inventory in anticipation of a climb in demand.

Expect the company to continue to pour money into building inventory, and spend less on acquisitions. The firm has traditionally focused its cash flow on expanding its business, (and this is a sign the company is in good health). Honeywell International Inc. (NYSE:HON) can now use the cash that it typically has on hand at the end of each quarter, to focus on inventory. Cash flow at the firm has traditionally been in the billions. At the end of last year, it was $3.5 billion, and $2.8 billion the year before.

Inventory is the common denominator
The inventory of companies in growing industries should play an important role in deciding which stocks to buy. Both The Boeing Company (NYSE:BA) and Honeywell International Inc. (NYSE:HON) look prepared for what’s to come in aerospace, but Parker-Hannifin Corporation (NYSE:PH) appears caught off guard with the attention its aerospace segment has received. While I consider the other two companies buys, Parker-Hannifin Corporation (NYSE:PH) will need to prove it is able to increase inventories to meet aerospace demand before I consider picking up shares of this stock.

The article Are These Companies Poised to Meet Expected Aerospace Demand? originally appeared on Fool.com and is written by Phillip Woolgar.

Phillip Woolgar has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned.

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