BWA - Garrett Motion: An Underfollowed And Misunderstood Cashflow Machine

Our Thesis in Summary

Garrett Motion Inc (GTX) (Garrett) is a small, underfollowed and misunderstood recent spin-off from Honeywell International Inc (HON) (Honeywell). Garrett commenced trading independently on the NYSE on September 17, 2018.

The dynamics of spin-offs have been comprehensively discussed in Joel Greenblatt’s excellent book, You can be a stock market genius(1997). Garrett is no exception: its financial statements are superficially messy, and the stock predictably began falling almost as soon as Honeywell stockholders found it appearing in their brokerage accounts. In fact, the