TransDigm Group Incorporated
) hit an all-time high of $155.97 on May 15, 2013. Total shares
traded on that date were 556,683, more than double the average
volume of shares traded over the last three months aggregating
273,703. The closing price of TransDigm on May 15 was $154.69,
representing a year- to-date return of 10.1%.
Shares of this leading global designer, producer and supplier
of highly engineered aircraft components, had hit a new 52-week
high twice in the last four months. TransDigm has delivered an
average positive earnings surprise of 22.30% over the trailing
four quarters and has a market cap of $7.51 billion with a
long-term expected earnings growth rate of 16.55%.
On the same day, TransDigm announced that it has agreed to
acquire New York-based, Arkwin Industries Inc. for an all cash
deal worth $286 million. TransDigm believes that Arkwin, which
manufactures highly engineered aerospace hydraulic and fuel
system components for commercial and military aircraft,
helicopters and other specialty applications, will help it widen
its portfolio on a number of platforms and engine applications.
Arkwin is a key supplier to Boeing, Airbus, Bombardier and
Embraer regional jets. Management believes that this acquisition
will create significant value addition to the firm and this has
likely boosted the investor confidence.
Also, TransDigm recently acquired
) which designs and manufactures highly engineered aviation
components for use in commercial military for $7.75 per share in
TransDigm reported its second quarter results on May 7,
wherein, it managed to beat the Zacks Earnings Consensus by a
penny and reported a 10% year-over-year growth in sales.
Concurrent with the earnings release, management also revised its
net sales and adjusted earnings per share guidance for fiscal
2013 upward, and now expects fiscal sales to be in the range of
$1,840 million to $1,880 million with adjusted EPS to be $6.83 to
With a strong free cash flow and meticulous capital structure,
TransDigm seems to be utilizing its resources for inorganic
growth, which are helping it boost its core operations. The
company's financial performance continues to reflect the ability
of its proven operating strategy to consistently create real
intrinsic value for shareholders. TransDigm believes that these
acquisitions will provide incremental revenue and earnings for
the company going forward. It seems that investors are also
impressed with TransDigm's strategic acquisitions and its growth
in aftermarket revenues, which yields higher gross margin and
provides stability during downturns.
TransDigm currently carries Zacks Rank #3 (Hold). Some other
stocks in the industry worth mentioning are
Kratos Defense & Security Solutions, Inc
), each carrying a Zacks Rank#1(Strong Buy).
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