Here's Why Renaissance Large Cap Growth Strategy Exited Its Position in Honeywell International (HON)

Renaissance Investment Management, an investment management company, released its Q1 2025 “Large Cap Growth Strategy” investor letter. A copy of the letter can be downloaded here. The S&P 500 experienced a 4.3% loss in Q1 due to uncertainty in technology stock valuations and US economic policies. However, seven sectors showed positive returns, with Energy, Health Care, and Utilities sectors showing the strongest performance. The S&P 500 has not experienced a significant correction since 2023, which can be expected to occur every couple of years. However, there are still good investment opportunities in high-quality, reasonably priced stocks that have not matched concentrated market indices. The S&P 500 (-4.3%) and Russell 1000 Growth Index (-10%) declined in Q1, with large-cap stocks outperforming smaller-cap stocks and Value outperforming Growth. For the quarter, the strategy exceeded the Russell 1000 Growth benchmark and lagged the S&P 500. For more information on the fund’s best picks in 2025, please check its top five holdings.

In its first-quarter 2025 investor letter, Renaissance Large Cap Growth Strategy highlighted stocks such as Honeywell International Inc. (NASDAQ:HON). Honeywell International Inc. (NASDAQ:HON) is an innovation and technology company that provides aerospace technologies, industrial automation, building automation, and energy and sustainable solutions. The one-month return of Honeywell International Inc. (NASDAQ:HON) was 11.40%, and its shares gained 12.16% of their value over the last 52 weeks. On May 22, 2025, Honeywell International Inc. (NASDAQ:HON) stock closed at $223.63 per share with a market capitalization of $143.72 billion.

Renaissance Large Cap Growth Strategy stated the following regarding Honeywell International Inc. (NASDAQ:HON) in its Q1 2025 investor letter:

"We also sold our position in Honeywell International Inc. (NASDAQ:HON) following a deterioration in fundamental factors and following several quarters of disappointing operating results. Honey well faces subdued demand from its industrial segment as customers continue to digest post COVID spending, leading to a shortfall in our short-cycle product growth expectations. We believe it is prudent to move to the sidelines as these external forces will likely remain challenges for the foreseeable future."

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, compared to 55 in the third 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 undervalued AI stock set for massive gains.

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.