1. TransDigm Group Incorporated (NYSE:TDG)
Number of Hedge Fund Holders: 67
TransDigm Group Incorporated (NYSE:TDG), headquartered in Cleveland, Ohio, is a publicly traded aerospace manufacturing company specializing in the development and production of engineered aerospace components. Established in 1993 through the consolidation of four industrial aerospace firms in a leveraged buyout, the company operates through three main segments: Power & Control, Airframe, and Non-aviation. Serving diverse clientele, TransDigm Group Incorporated (NYSE:TDG) provides solutions to engine and power system component suppliers, airlines, third-party maintenance providers, military procurement agencies, and repair facilities.
On August 8, TransDigm Group Incorporated (NYSE:TDG) released its financial results for the quarter ending on July 1, 2023. The company posted a non-GAAP EPS of $7.25 and a revenue of $1.74 billion, surpassing Wall Street estimates by $0.85 and $55.16 million, respectively.
According to Insider Monkey’s second quarter database, 67 hedge funds were bullish on TransDigm Group Incorporated (NYSE:TDG), same as the prior quarter. Mark Massey’s AltaRock Partners is the leading stakeholder of the company, with 1.35 million shares worth $1.2 billion.
Baron Small Cap Fund made the following comment about TransDigm Group Incorporated (NYSE:TDG) in its second quarter 2023 investor letter:
“We have had some extraordinary winners over time. For instance, we bought DexCom, Inc. at a $950 million market cap in 2012, and it is now valued at $50 billion (the stock has appreciated 41% annually since the Fund’s initial purchase). TransDigm Group Incorporated (NYSE:TDG) has grown from $1.1 billion at purchase to $49 billion presently (and the stock has appreciated 29% annually since the Fund’s initial purchase 17 years ago). IDEXX Laboratories, Inc. has gone from $2 billion at purchase to $42 billion over almost 15 years and the stock has appreciated 26% annually during that time frame. The Trade Desk is now valued at $38 billion and was $433 million when we first purchased shares over 6 years ago. The stock has appreciated almost 60% annually since our initial purchase. Pretty amazing. All four stocks have been solid performers this year, contributing nicely to the Fund’s returns.
Since we run a small-cap fund but want to hold on to these great investments as they continue to compound and perform, we reduce the positions sizes over the holding period so that the overall market capitalization of the Fund is palatable. For each of the four stocks mentioned above, we presently own 11% or less of our peak positions. We take the proceeds from the trimming of these positions to fund new small-cap investments, with the hopes of somehow replicating these results.”
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