BROKERS’ NOTES: Buy Honeywell, sell Transaction Capital

David Shapiro, portfolio manager: Sasfin Securities

BUY: Honeywell

It’s a diversified American company with really good exposure to the productive sectors of the US economy over the next five to 10 years. It’s involved in aerospace (the software side), it supplies technology for green buildings, it makes materials for modern industrial technologies and it has a lot of safety products in apparel and footwear. It hasn’t been a good performer, but I think it’s the kind of company that has been overlooked. It might not perform in the short term but it has the kind of businesses that will grow strongly in the next five years and is something to add to a list of offshore stocks.

SELL: Transaction Capital 

I was a bit upset with Transaction Capital’s latest results. I’m not questioning management, I’m questioning the market. I was disappointed in the SA Taxi side of the business, which exposes the slowdown happening in this country in terms of transport — and that leads me to worry about WeBuyCars. Competition is coming in, interest rates are going up and consumers are going down. I’m not going short but I wonder whether we’ve seen the best in that business for now.