It's one of the best growth stories around and you've probably never heard of it: AAR (AIR) - Get Report , a provider of maintenance and related services to aircraft operators.

Aerospace is booming, but the industry's well-known names offer limited investment upside. AAR, on the other hand, is set for the sort of market-thumping gains that its more famous peers would envy.

AAR keeps commercial and military aircraft flying; it's also enjoying amazing earnings growth. Yet the company scarcely gets a mention on CNBC and the other TV noise machines. AAR shares were roughly flat in Thursday trading.

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Headquartered in Wood Dale, Ill., AAR boasts a vast global footprint and ranks as the biggest independent maintenance, repair and overhaul (MRO) provider in the U.S. by annual man-hours generated. With a market cap of $1.31 billion, AAR is the largest, publicly traded direct play on MRO growth.

AAR is enjoying tailwinds from the aerospace resurgence in both the commercial and military sectors.

The company operates in two segments, Aviation Services and Expeditionary Services. The Aviation Services segment offers aftermarket support, inventory management and distribution services.

The Expeditionary Services segment provides products and services supporting the movement of equipment and personnel by the U.S. Department of Defense, foreign governments and non-governmental organizations.

Demand for MRO is particularly strong these days, as air travel enjoys one of its greatest upswings since the end of World War II. The global economic recovery is prompting consumers to open their wallets for plane tickets, and airlines are dipping into their coffers to make long-deferred repairs and upgrades.

This year, AAR has been racking up contract wins from expanding airlines, most recently in November when it inked a major deal with Air New Zealand for inventory support.

The coming surge in global military spending also should benefit AAR. Major AAR clients include Boeing, the world's largest maker of commercial and military planes. AAR partners include Eaton, a growing power management company based in Ireland.

AAR is scheduled to report third-quarter earnings on Dec. 15. The expected numbers are impressive, pointing to earnings growth momentum that should last well into next year.

The average analyst expectation is for earnings per share (EPS) to come in at 35 cents, more than double the 16 cents posted in the same quarter a year ago. Fourth-quarter EPS is slated to be 36 cents, compared to 26 cents last year. Full-year EPS is pegged at $1.43, compared to $1.13 in 2015. For fiscal 2017, EPS is pegged at $1.74. Earnings growth for the next five years is estimated at 18.95% (per annum).

Not surprisingly, AAR stock has risen nearly 45% year to date, compared to about 10.5% for the S&P 500. With a trailing 12-month price-to-earnings ratio (P/E) of 38.5, the stock is pricey compared to the aerospace/defense sector's trailing P/E of 18.3. But there's still significant upside left to AAR, driven by its exceptional earnings potential.

Shares now trade at about $38; the one-year analyst consensus target price is $43. Some analysts are considerably more bullish. Credit Suisse Group has reissued a "buy" rating and set a one-year target price at $74. You can pay a premium now and still get rewarded, or wait to buy on dips.


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John Persinos is an editorial manager with Investing Daily. Persinos also is an analyst with the Teal Group, an aerospace/defense consultancy based in Virginia. At the time of publication, Persinos owned stock in Boeing.