David Abrams’ 2022 Portfolio: Top 5 Stock Picks

4. TransDigm Group Incorporated (NYSE:TDG)

Abrams Capital Management’s Stake Value: $351 million

Percentage of Abrams Capital Management’s 13F Portfolio: 8.2%

Number of Hedge Fund Holders: 64

TransDigm Group Incorporated (NYSE:TDG) is an aerospace manufacturer based in Cleveland.

On May 11, Wells Fargo analyst Matthew Akers lowered his price target on TransDigm Group to $620 from $700 and kept an Overweight rating on the shares post the Q1 results. 

Akers remains optimistic on TransDigm Group’s stock as the  recent commentary from the Wells Fargo Industrials Conference supports enduring aftermarket strength while the company has begun to step up the stock buyback, supporting the share price from this point on.

Abrams Capital Management holds a little over 539,000 shares in the company but the lead stakeholder happens to be Stockbridge Partners that has invested $1 billion in TransDigm Group as of the first quarter of 2022. 

Vulcan Value Partners brought up TransDigm Group in their Q2, 2021 investor letter. Here’s what they had to say:

“TransDigm Group Inc., another material contributor during the quarter, is an aerospace manufacturer providing highly engineered, niche components for use on commercial and military aircraft. The vast majority of the company’s profits come from aftermarket sales. Its business was impacted by the global pandemic; however, the company has been able to maintain margins despite strong revenue headwinds, and it continues to generate strong free cash flow.”