Below we presented the list of 5 Best Aerospace Stocks to Buy Now. For our detailed discussion and a more comprehensive list please see 10 Best Aerospace Stocks to Buy Now.
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, lithium mining is one of the fastest growing industries right now, so we are checking out stock pitches like this emerging lithium stock. We go through lists like the 10 best hydrogen fuel cell stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage. Keeping this in mind let’s take a look at the best aerospace stocks to buy:
5. Heico Corp (NYSE:HEI)
No of HFs: 43
Total Value of HF Holdings: $712 Million
HEI is the 5th best aerospace stock to buy now. The top hedge fund holder of this stock is Robert Joseph Caruso’s Select Equity Group which had $88 million invested in the stock at the end of September. An insider recently purchased 1,054 shares at around $118 in January 2021. The stock is up 8% since then. On January 21, HEI’s Director Alan Schriesheim sold 3,000 shares of the firm’s stock. The stock was sold at an average price of $115.90, for a total transaction of $347,700.00.
4. Boeing (NYSE:BA)
No of HFs: 43
Total Value of HF Holdings: $1.70 Billion
At the end of September, a total of 24 hedge funds tracked by insider monkey were long this stock. An insider recently purchased 1,152 shares at around $173 in August 2020. The stock is up 19% since then. Miller Value Partners mentioned BA in its Q1 2020 investor letter:
“We’ve known Boeing for a long time. It’s always been a high quality company that’s traded for a premium valuation owing to its position as a global duopoly. We’d looked at it recently after weakness due to its highly publicized Max 737 issues, but it never got cheap enough for us to pull the trigger. After the pandemic, the stock went into freefall as its customer bases’ business dried up and people worried about its liquidity. The stock fell from $338 on February 19th when the S&P hit its high to a low of $89. We bought the stock after the new CEO Dave Calhoun said publicly that it would not take government capital if it required equity dilution because it had many other options. Our average price is just above $120 where it was trading for less than 7x what it earned in 2018. It will likely take a while to normalize to those earnings levels, but this business will survive and ultimately we will own a leader in a global duopoly. Even on depressed forecasts, the company currently has about a 10-15% free cash flow yield. If and when the economy normalizes, we think Boeing could be worth more than double its current price.”
Pixabay/Public Domain
3. Lockheed Martin Corp (NYSE:LMT)
No of HFs: 47
Total Value of HF Holdings: $1.66 Billion
The top hedge fund holder of this stock is Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital which had $479 million invested in the stock at the end of September. An insider recently purchased 1,354 shares at around $376 in August 2019. The stock is down 10% since then. LMT was mentioned as one of the Top 10 Earnings Growth Stocks with Dividends for 2021. RiverPark Advisors LLC mentioned LMT in its 1Q 2020 investor letter:
“RingCentral is the largest and fastest growing pure play Unified Communications as a Service (UCaaS) vendor. Traditionally, business communications have been comprised of on-premise hardware-based private branch exchanges (PBX), which primarily support voice-only desktop phones. These systems do not support employees who now communicate from anywhere with any device, using voice, video, text, messaging and social media. UCaaS encompasses solutions addressing all these needs in a capital and labor light model for customers.
Pixabay/Public Domain
2. Raytheon Technologies Corp (NYSE:RTX)
No of HFs: 55
Total Value of HF Holdings: $2.98 Billion
The top hedge fund holder of this stock is Eric W. Mandelbatt’s Soroban Capital Partners’ which had $801 million invested in the stock at the end of September. An insider recently purchased 1,000 shares at around $52 in October 2020. The stock is up 38% since then.
1. Transdigm Group Inc (NYSE:TDG)
No of HFs: 64
Total Value of HF Holdings: $6.12 Billion
TDG tops the list of 10 best aerospace stocks to buy now. The top hedge fund holder of this stock is Chase Coleman and Feroz Dewan’s Tiger Gobal Management LLC which had $834 million invested in the stock at the end of September. An insider recently purchased 1 share at around $600 in December 2020. The stock is up 0.8% since then. Vulcan Value Partners mentioned TDG in its Q2 2020 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. Most of its products are small volume, low cost items that are sole sourced from TransDigm. It is economically unlikely for a new company to compete on any particular product because volumes on individual components are not large enough to justify the investment in manufacturing facilities and regulatory approval. The company produces high levels of free cash flow, has long equity duration, a strong business model, and an effective, shareholder-oriented management team who are good capital allocators.”
Please also see Top 10 Robotics and Artificial Intelligence Stocks to Buy and Top 10 Earnings Growth Stocks with Dividends for 2021
