Mike S. Newton, CIM FCSI TransDigm Group TDG-N TOP PICK Jul 19, 2016

(A Top Pick July 19/16. Up 20.36%.) One of the best aerospace aftermarket companies. They had a big dip in February and April which caused a lot of concern because of a negative report, but this company keeps plugging away and persistently grabbing market share. A high cash flow machine and a high barrier to entry. He would like to get back into this as some point.

(A Top Pick Feb 12/19, Up 63%) The long-term chart enticed him to buy. They're in aerospace. 90% of sales are from proprietary products. 70% of what they sell, they are the sole-source provider. Also, only 3% of their business is from the Boeing 737 Max. They won't raise guidance because of coronavirus worries. They recently gave investors $3.5 billion in special dividends, yet still expect to have $3 billion in cash by year's end.

Aftermarket manufacturer of airline parts (cheaper).
Very high debt levels a concern.
Good margins on products.
Strong business, but prefers other names in sector. 
Current valuation high. 

The aerospace sector is a bull market now. TDG has a good balance sheet.

They make airplane parts.  They've acquired 48 companies in this space, so no matter what plane you fly, TDG makes a piece of that. They have pricing power. A permanent compounder.

Sole source for low-value components, like bathrooms and seatbelts, in high-value aircraft. Aircraft fleets are getting older. Airline miles continue to grow. Great compounder, best position in its value chain. 

No dividend, but it does have regular cash and special dividends, which speaks to management quality. If management can't find a good acquisition, it diverts the cash to shareholders instead.

Aerospace replacement parts such as seatbelts, for which it gets paid a hefty price. Serial acquirer. Uses a lot of leverage to pay out special dividends. Sees long-term growth in global air travel, and this name will benefit. No dividend.

Aerospace parts. Serial acquirer. A hard business to break into, especially as you have to trust the partners that are making parts for you. Valuations in the space have gone straight up, as demand for air travel is exploding. Extremely bullish on the name. Likes management's ability to raise prices, keep costs low, and allocate cashflow at high rates of return.

Increasingly more attractive. He's buying for the portfolio. Return is positive on a lower stock price because they do big special dividends. Stock price may look worse, but you're getting a bunch of cash along the way. In the very attractive aerospace end market. 

Stock's down due to de-stocking in some verticals, thinks this is transient. Attractive industry, great management, underleveraged balance sheet.