Stock of the Day

November 8, 2019

TransDigm Group (TDG)

$1,291.58
-$20.96 (-1.6%)
Market Cap: $73.61B

About TransDigm Group

TransDigm Group Incorporated designs, produces, and supplies aircraft components in the United States and internationally. The Power & Control segment offers mechanical/electro-mechanical actuators and controls, ignition systems and engine technology, specialized pumps and valves, power conditioning devices, specialized AC/DC electric motors and generators, batteries and chargers, databus and power controls, sensor products, switches and relay panels, hoists, winches and lifting devices, and cargo loading and handling systems. This segment serves engine and power system and subsystem suppliers, airlines, third party maintenance suppliers, military buying agencies, and repair depots. The Airframe segment provides engineered latching and locking devices, engineered rods, engineered connectors and elastomer sealing solutions, cockpit security components and systems, cockpit displays, engineered audio, radio and antenna systems, lavatory components, seat belts and safety restraints, engineered and customized interior surfaces and related components, thermal protection and insulation products, lighting and control technology, and parachutes. This segment serves airframe manufacturers, cabin system and subsystem suppliers, airlines, third party maintenance suppliers, military buying agencies, and repair depots. The Non-aviation segment offers seat belts and safety restraints for ground transportation applications; electro-mechanical actuators for space applications; hydraulic/electromechanical actuators and fuel valves for land-based gas turbines; refueling systems for heavy equipment used in mining, construction, and other industries; and turbine controls for the energy and oil and gas markets. This segment serves off-road vehicle and subsystem suppliers, child restraint system suppliers, and satellite and space system suppliers; and manufacturers of heavy equipment. TransDigm Group Incorporated was founded in 1993 and is based in Cleveland, Ohio.

TransDigm Group Bull Case

Here are some ways that investors could benefit from investing in TransDigm Group Incorporated:

  • Recent upgrades from multiple analysts, including Wells Fargo & Company raising their rating from "equal weight" to "overweight" and increasing the price target to $1,500.00, indicate strong confidence in the company's future performance.
  • The current stock price is approximately $1,248.07, which may present a buying opportunity for investors looking to enter at a lower price before potential gains.
  • Insider ownership remains significant, with corporate insiders owning 4.09% of the stock, suggesting that those with intimate knowledge of the company have a vested interest in its success.
  • TransDigm Group Incorporated has shown resilience in the aerospace sector, designing and supplying critical aircraft components, which positions it well for growth as air travel continues to recover.
  • Institutional investors hold a substantial 95.78% of the company's stock, indicating strong institutional confidence and support for the company's long-term prospects.

TransDigm Group Bear Case

Investors should be bearish about investing in TransDigm Group Incorporated for these reasons:

  • Recent insider sales, including a significant transaction where the CEO sold shares representing a 71.03% decrease in their position, may raise concerns about the company's future outlook from those who know it best.
  • Despite positive analyst ratings, the stock has seen a high level of insider selling in the last 90 days, with 109,525 shares sold, which could signal potential issues or lack of confidence among insiders.
  • Analysts have mixed opinions, with Deutsche Bank cutting their rating from "buy" to "hold" and lowering their target price, indicating some uncertainty in the stock's performance.
  • The aerospace industry can be volatile, and any downturn in air travel or defense spending could negatively impact TransDigm Group Incorporated's revenue and profitability.
  • With a high percentage of institutional ownership, any significant sell-off by these investors could lead to increased volatility and downward pressure on the stock price.

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