11 Best American Defense Stocks to Buy Now

4. TransDigm Group Incorporated (NYSE:TDG)

Number of Hedge Fund Holders: 69

TransDigm Group Incorporated (NYSE:TDG) manufactures engineered aircraft components for commercial and military aircraft. Recent strategic acquisitions over the past year are shaping the company well for significant increases in future revenue and to further solidify its position in the industry.

On July 31, 2024, it completed the acquisition of Raptor Scientific, a leading provider of complex text and manufacturing solutions for the aerospace and defense markets, for $655 million. Nearly all of its revenue comes from proprietary products.

Earlier in June, TransDigm Group Incorporated (NYSE:TDG) acquired Communications & Power Industries’ Electron Device business for $1.385 billion in cash. It is a leading manufacturer and supplier of electronic components and subsystems for the aerospace and defense industry, with about 70% of its revenue generated from the aftermarket.

TransDigm Group Incorporated (NYSE:TDG)’s financial performance remains strong. On February 4, the company reported results for the first quarter of fiscal 2025. It generated a net income of $493 million, up 29% from last year, driven by a 12% year-over-year surge in net sales. Adjusted EPS stood at $7.83, growing 9% from the prior year’s quarter.

Wall Street analysts are bullish on TransDigm Group Incorporated (NYSE:TDG) with a consensus Buy rating and an average share price upside potential of 9.81%. According to Insider Monkey’s database for Q4 2024, 69 hedge funds held a stake in the company, making it one of the best defense stocks to buy. AltaRock Partners was the largest investor in TDG, with holdings of nearly $1.27 billion, as of December 31, 2024.