TransDigm Group (TDG)

All of his Top Picks today have no momentum or key catalysts. Just excellent, well-run businesses that will add long-term value. Doesn't know how they'll look 1 year from now, but will certainly look good 3-5 years hence.

After-market aerospace parts. (They also do initial supply, but replacement parts are where they make their $$). Monopoly on parts. No idea why stock's down so much recently; could be that customers are buying new, not refurbishing old. More people are getting richer and travelling. 

Well run, high free cashflow. No dividend.

Good way to play the aerospace sector.

Large, special dividends get paid out but then are negatively reflected in the stock price. Buying up more of its competitors, adding to durability and stability of cashflow. Secular growth industry.

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.

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.

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.

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.

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.

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

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. 

(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.

(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 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 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.