Key insights
- The post discusses TransDigm Group (TDG), a defense stock trading near 52-week lows despite positive earnings and guidance. The author questions why TDG isn't benefiting from geopolitical uncertainty like other defense stocks (e.g., Lockheed Martin) and seeks opinions on its potential upside and whether it represents a falling knife scenario. The post highlights concerns about TDG's current market performance relative to its financial results and sector trends.
I was thinking that TDG would also get a boost similar to LMT and RDX during this period of uncertainty and potential escalation of war. However, TDG is trading at 52-week lows. I had anticipated based on the different evaluations that TDG would have an upside within a year of about 1600-2000, which seems to be a significant potential growth? Currently its PE is at 37x which I thought is actually relatively reasonable. The last earnings it had it actually considerably beat the estimated EPS along with revenue and also has positive and improved upcoming guidance. I’m curious to people’s thoughts on:
Why is TDG trading in such a negative manner?
Does TDG truly have a positive upside?
Is it more of a falling knife that I might be catching?
I would love to hear what you all’s thoughts are on this one. I was wondering if this one might be a worthy pick-up currently.