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Why Honeywell is still cheap vs the competition

One important rule that Jim Cramer abides by, is to distinguish between when to buy a company's shares long after it has had a run and when to recognize when you're in a value trap.

If the company is not doing anything to make itself better, yes it's time to bail. But if the company is like Honeywell and is run by a strong CEO and has plenty of innovation in the pipeline, that's a keeper.

Earlier in the week Cramer spoke with the CEO of Honeywell Dave Cote, who showed the "Mad Money" host some of the innovation that Honeywell is working on currently. Cramer was reminded why this stock is still cheap versus the competition—it is always innovating.

For instance, some of the new technology that Cote showed Cramer didn't even exist a few years ago. That means that the sales this company will generate aren't expected or anticipated by anyone. A big sign that this stock is still cheap.

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And while many conglomerates that mimic Honeywell are shrinking and breaking up, Honeywell is getting stronger. And Cramer spoke with Cote about some of the new innovation coming out, such as the a new touch pad that is placed in the cockpit of an airplane.

"It eliminates over 400 buttons, saves about half a cubic foot of space and 70 lbs and is easier for them to use," Cote said.

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