Analysis: HON BA HD LRCX

After you receive this Alert, we will be selling 100 shares of Honeywell (HON) at roughly $155.21. Following the trade, HON will represent 4.34% of the portfolio.

First off, thank you to all our club members who joined our March Members-Only Call this afternoon! We hope you found our conversation valuable!

For those members of the club who were unable to attend, as a reminder, a full replay of the call will be available shortly and an edited transcript of the call will be posted in the coming days. The replay currently can be found on our homepage here .

During the question and answer section of our conference call, we talked about the need of not being greedy and our desire to take a gain in Honeywell. We think the world of CEO Darius Adamczyk and his management team, and we know organic sales growth is off to a strong start this year (we mentioned this in last week's Weekly Roundup), however, we are being a bit watchful here due to the company's (minimal) exposure to the Boeing (BA) 737 Max program, which if temporarily paused, would carry a small amount of risk to the broader aerospace market.

Look, Honeywell is a very small supplier to the 737 program. The amount of sales Honeywell generates from it is not at a level where we are being forced to take action. If we felt this way, you would see a more aggressive sale trim and not one that still leaves HON as one of our largest positions. More importantly, though, we've been consistent buyers at far lower prices, making now a good time as ever to make sure we are locking in gains as stocks move higher. That's just discipline.

Therefore, we will downgrade our rating to a TWO and briefly move to the sidelines until more clarity around Boeing's 737 program is known, and also realize a gain of ~4.75% with this sale.

Lastly, the cash raised here improves our flexibility. There are a few positions in the portfolio we want to be bigger in (namely Home Depot (HD) which we profiled on the call and Lam Research (LRCX) ), and this cash will give us more ammunition to buy on a pullback.