5 Best Cheap Stocks To Buy Now According To Billionaire Abrams

2. Transdigm Group Inc (NYSE: TDG)

Although shares of Transdigm Group Inc (NYSE: TDG) are still struggling to trade in green in the last twelve months, Billionaire Abrams strategy of buying Transdigm shares at dip during the first quarter of 2020 benefited his hedge fund. Abrams Capital Management initiated a stake in Transdigm at an estimated price of $320 a share in Q1, down significantly from the current $570 level.

In a Q2 investor’s letter, Vulcan Value Partners stated that Transdigm Group is a good stock to buy. Here is what Vulcan Value Partners said:

“TransDigm Group Inc. is an aerospace manufacturing firm that provides highly engineered, niche components for use on commercial and military aircraft. The vast majority of the company’s profits come from aftermarket sales. Most of its products are small volume, low cost items that are sole sourced from TransDigm. It is economically unlikely for a new company to compete on any particular product because volumes on individual components are not large enough to justify the investment in manufacturing facilities and regulatory approval. The company produces high levels of free cash flow, has long equity duration, a strong business model, and an effective, shareholder-oriented management team who are good capital allocators.”