TransDigm Group Inc (TDG): Today's Featured Aerospace/Defense Laggard

Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.

TransDigm Group ( TDG) pushed the Aerospace/Defense industry lower today making it today's featured Aerospace/Defense laggard. The industry as a whole closed the day down 0.8%. By the end of trading, TransDigm Group fell $5.74 (-4.4%) to $125.65 on heavy volume. Throughout the day, 2.1 million shares of TransDigm Group exchanged hands as compared to its average daily volume of 447,800 shares. The stock ranged in price between $120.65-$128.89 after having opened the day at $122.50 as compared to the previous trading day's close of $131.39. Other companies within the Aerospace/Defense industry that declined today were: Astrotech Corporation ( ASTC), down 5.9%, Smith & Wesson Holding Corporation ( SWHC), down 5.1%, CAE ( CAE), down 3.2%, and Astronics Corporation ( ATRO), down 3.1%.
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TransDigm Group Incorporated designs, produces, and supplies engineered aircraft components for use on commercial and military aircraft principally in the United States. TransDigm Group has a market cap of $7 billion and is part of the industrial goods sector. The company has a P/E ratio of 24.5, above the S&P 500 P/E ratio of 17.7. Shares are up 42.1% year to date as of the close of trading on Wednesday. Currently there are five analysts that rate TransDigm Group a buy, one analyst rates it a sell, and six rate it a hold.

TheStreet Ratings rates TransDigm Group as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, impressive record of earnings per share growth, compelling growth in net income, good cash flow from operations and expanding profit margins. We feel these strengths outweigh the fact that the company is trading at a premium valuation based on our review of its current price compared to such things as earnings and book value.

On the positive front, AerCap Holdings N.V ( AER), up 4.2%, Sifco Industries ( SIF), up 3.7%, Edac Technologies Corporation ( EDAC), up 2.8%, and LMI Aerospace ( LMIA), up 1.7%, were all gainers within the aerospace/defense industry with Rockwell Collins ( COL) being today's featured aerospace/defense industry leader.

For investors not wanting singular stock exposure, ETFs may be of interest. Investors who are bullish on the aerospace/defense industry could consider iShares DJ US Aerospace & Def Idx ( ITA) while those bearish on the aerospace/defense industry could consider ProShares Short Dow 30 ( DOG).

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