5 Best Aerospace Stocks To Buy

1. TransDigm Group Incorporated (NYSE:TDG)

Number of Hedge Fund Holders: 63

TransDigm Group Incorporated (NYSE:TDG) was founded in 1993 and is based in Cleveland, Ohio. The company designs, produces, and supplies aircraft components in the United States and internationally. TransDigm Group Incorporated (NYSE:TDG) operates through Power & Control, Airframe, and Non-Aviation segments. It is one of the premier aerospace stocks to invest in. 

On November 10, TransDigm Group Incorporated (NYSE:TDG) reported a Q3 non-GAAP EPS of $5.50 and a revenue of $1.51 billion, outperforming Wall Street estimates by $0.27 and $10 million, respectively. In FY 2023, net sales are anticipated to be in the range of $5.99 billion to $6.19 billion, versus a consensus of $6.06 billion.

Morgan Stanley analyst Kristine Liwag on December 12 maintained an Overweight rating on TransDigm Group Incorporated (NYSE:TDG) but lowered the price target on the shares to $765 from $801 as she assessed where aerospace companies are in their recovery journey versus their historical valuation range and rolled forward her valuations among those in the group. She remains bullish on the ongoing aerospace recovery next year, noting that global air traffic is now at nearly 75% of pre-COVID-19 levels as of September and full normalization is “likely” in 2023.

According to Insider Monkey’s data, 63 hedge funds were long TransDigm Group Incorporated (NYSE:TDG) at the end of Q3 2022, compared to 66 funds in the prior quarter. Sharlyn C. Heslam’s Stockbridge Partners is the largest stakeholder of the company, with 1.60 million shares worth $841 million. 

Here is what Vulcan Value Partners has to say about TransDigm Group Incorporated (NYSE:TDG) in its Q2 2022 investor letter:

“TransDigm Group Inc. is an aerospace manufacturing firm that provides highly engineered, niche components for use on commercial and military aircraft. The vast majority of the company’s profits come from aftermarket sales of sole-sourced products. The company produces high levels of free cash flow and has an effective, shareholder-oriented management team who are good capital allocators. Despite the company’s strong results during the quarter and solid outlook, its stock price declined.”

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