TDG - Why TransDigm Shares Flew Higher in July
Airline earnings season proved to be a mixed bag for the sector, with CEOs forecasting continued strong demand at least somewhat offset by soaring costs. Though the forecast failed to inspire airline investors, it was good news for some of the industry's top suppliers. Shares of one such company, TransDigm Group (NYSE: TDG) , finished the month up 16%, according to data provided by S&P Global Market Intelligence , despite the company making very little news during the month.
TransDigm is a manufacturer of a wide range of parts and subsystems for the commercial aerospace and defense business. The company is involved in a variety of different businesses and a lot of new plane platforms, but more than 75% of its earnings comes from the commercial aftermarket, or spare parts, business.
The company has been a great long-term performer, with the shares up more than 400% over the past decade, but that share-price appreciation has slowed since the pandemic. A slowdown in travel has led to less demand from airlines for spare parts, limiting TransDigm's profits.
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Why TransDigm Shares Flew Higher in July