Barry Schwartz TransDigm Group TDG-N TOP PICK Oct 24, 2024

A leading supplier of engineered parts for both commercial and military aircraft. 70% of their business is the aftermarket. Lots of great future growth available here.

(A Top Pick July 19/16. Up 16%.) An aerospace and defense company. They supply lots of mundane things to the airline business. Someone has decided to target this company saying that they buy and acquire companies, and then change the pricing. As soon as he saw the one negative story, he stepped aside and will come back when the dust settles.

(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.