10 Best Industrial Stocks to Buy According to Hedge Funds

04. TransDigm Group Incorporated (NYSE:TDG)

Number of Hedge Funds Holders: 78

TransDigm Group Incorporated (NYSE:TDG) Incorporated designs, produces, and supplies aircraft components in the United States and internationally. In Q1 2024, the count of hedge funds holding stakes in TransDigm Group Incorporated (NYSE:TDG) rose to 78 from 65 in the previous quarter, based on Insider Monkey’s database of 920 hedge funds. These stakes collectively amount to around $6.62 billion in value. Mark Massey’s AltaRock Partners emerged as the largest stakeholder among these hedge funds during this period. On June 20, a Deutsche Bank analyst raised TransDigm Group Incorporated (NYSE:TDG) price target to $1,524 from $1,435, maintaining a Buy rating ahead of the company’s investor day next week. The adjustment reflects strategic developments such as the early CPI acquisition closure, Calspan unit divestiture, and Raptor Scientific acquisition, expected to bolster TransDigm Group Incorporated (NYSE:TDG) financial outlook. The analyst anticipates potential capital deployment of up to $18 billion for mergers and acquisitions over the next 10 quarters, estimating each $1 billion invested could generate about 2% equity value creation by the third year.

Mar Vista Focus strategy stated the following regarding TransDigm Group Incorporated (NYSE:TDG) in its first quarter 2024 investor letter:

“TransDigm Group Incorporated (NYSE:TDG) delivered another impressive quarter, exceeding analysts’ expectations for both earnings and profitability. Its gross and EBITDA margins widened significantly, driven by strong performances in commercial aerospace and defense. Revenue growth in commercial aerospace aftermarket parts (+27%) and new defense orders were key contributors to this outperformance. Management responded by raising the full-year 2024 forecasts for revenue and profitability.

Continued growth in both defense and commercial aftermarket should be fueled by recovering passenger traffic, higher aircraft utilization, and a strong bookings backlog. With domestic travel exceeding pre-pandemic levels and international travel nearing full recovery, TransDigm appears well-positioned for continuous growth. This, combined with its efficient operations, should drive long-term stock price appreciation.”