TDG · TRANSDIGM GROUP

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TransDigm Group Incorporated designs, produces, and supplies aircraft components in the United States and internationally. The Power & Control segment offers mechanical/electro-mechanical actuators and controls, ignition systems and engine technology, specialized pumps and valves, power conditioning devices, specialized AC/DC electric motors and generators, batteries and chargers, databus and power controls, sensor products, switches and relay panels, hoists, winches and lifting devices, cargo loading and handling systems, delivery systems, and electronic components.

Close · 3M

+0.84%

Held by 2 AI ETFs

PQUS0.490%

as of Sep 1

AIEQ0.050%

as of Sep 4

Signal performance

Each tracked ETF's moves on this stock, grouped by fund. Returns are measured from the signal date to the latest close — hypothetical, no commissions or slippage.

Buy signals9

Win rate11% (1/9)

Avg buy return-7.32%

PQUSnow 0.490% of fund2 signals

PQUS · Weight increase · 2d

weight 0.290% → 0.380% (+0.090 pp)·stock down 1.1% in the 30 days before

Aug 21·entry $1200.35·now $1157.83Fresh

-3.54%

since Aug 21

PQUS · Weight increase · 2d

weight 0.200% → 0.290% (+0.090 pp)·stock up 2.1% in the 30 days before

Aug 14·entry $1256.90·now $1157.83Fresh

-7.88%

since Aug 14

AIEQnow 0.050% of fund7 signals

AIEQ · New entry · 1d

weight 0 → 0.050% (new)·stock down 4.2% in the 30 days before

Aug 2·entry $1285.56·now $1157.83Fresh

-9.94%

since Aug 2

AIEQ · Exit · 1d

weight 0.490% → 0 (exited)·stock up 5.7% in the 30 days before

Jul 1·entry $1309.18·now $1157.83

-11.56%

since Jul 1

AIEQ · Weight increase · 2d

weight 0.480% → 0.500% (+0.020 pp)·stock up 6.7% in the 30 days before

Jun 26·entry $1324.56·now $1157.83Fresh

-12.59%

since Jun 26

AIEQ · Weight increase · 2d

weight 0.460% → 0.490% (+0.030 pp)·stock up 12.7% in the 30 days before

Jun 18·entry $1328.31·now $1157.83Fresh

-12.83%

since Jun 18

AIEQ · Weight decrease · 2d

weight 0.460% → 0.440% (-0.020 pp)·stock up 3.1% in the 30 days before

Jun 4·entry $1228.09·now $1157.83

-5.72%

since Jun 4

AIEQ · New entry · 1d

weight 0 → 0.460% (new)·stock up 10.1% in the 30 days before

May 30·entry $1238.41·now $1157.83Fresh

-6.51%

since May 30

AIEQ · Exit · 1d

weight 0.130% → 0 (exited)·stock down 1.6% in the 30 days before

May 3·entry $1149.72·now $1157.83

+0.71%

since May 3

AIVLno longer held7 signals

AIVL · Exit · 1d

weight 0.234% → 0 (exited)·stock up 6.8% in the 30 days before

Jun 1·entry $1238.41·now $1157.83

-6.51%

since Jun 1

AIVL · Weight decrease · 2d

weight 0.241% → 0.234% (-0.007 pp)·stock down 6.5% in the 30 days before

May 15·entry $1148.97·now $1157.83

+0.77%

since May 15

AIVL · Weight decrease · 3d

weight 0.251% → 0.239% (-0.012 pp)·stock down 3.4% in the 30 days before

May 12·entry $1191.19·now $1157.83

-2.80%

since May 12

AIVL · Weight decrease · 2d

weight 0.251% → 0.240% (-0.011 pp)·stock down 0.7% in the 30 days before

May 11·entry $1198.67·now $1157.83

-3.41%

since May 11

AIVL · Weight increase · 3d

weight 0.234% → 0.251% (+0.017 pp)·stock up 1.8% in the 30 days before

May 7·entry $1241.98·now $1157.83Fresh

-6.78%

since May 7

AIVL · Weight increase · 2d

weight 0.234% → 0.247% (+0.013 pp)·stock up 5.5% in the 30 days before

May 6·entry $1233.37·now $1157.83Fresh

-6.12%

since May 6

AIVL · Weight increase · 2d

weight 0.234% → 0.237% (+0.003 pp)·stock up 1.2% in the 30 days before

Apr 28·entry $1154.06·now $1157.83Fresh

+0.33%

since Apr 28

Sell signals show what the stock did after the AI exited. A negative number means the AI's exit was well-timed.

Buffett-style framework

Fails the frameworkas of May 31

The AI ETFs AIEQ, PQUS, and AIVL are currently holding TransDigm Group, with AIEQ making a new entry, indicating an optimistic view on the company. This contrasts sharply with the framework's verdict of 'Fail,' which is based on concerns regarding the company's high leverage and premium valuation.

Circle of CompetenceTransDigm Group's focus on proprietary aerospace components with long product lifecycles and significant aftermarket demand suggests stable and predictable unit economics, allowing for reasonable projection of ten-year cash flows.
Economic MoatTransDigm benefits from strong economic moats through high switching costs and regulatory barriers in its specialized aerospace components, often holding sole-source positions for critical aircraft parts.
ManagementInsufficient data is provided to assess management's candor, capital allocation discipline, or personal incentives, making it difficult to judge against the framework criteria.
Financial HealthThe extremely high EV/EBITDA ratio of 53.24 strongly suggests significant leverage, raising concerns about manageable debt and potential fragility despite a very high reported ROE.
Margin of SafetyThe high PER of 33.81, PBR of 5.98, and exceptionally high EV/EBITDA of 53.24 indicate a premium valuation, suggesting no discernible margin of safety at the current price.

TransDigm Group operates within a predictable circle of competence and possesses durable economic moats, making it a wonderful business in many respects. However, its significant leverage, as indicated by an exceptionally high EV/EBITDA, and its premium market valuation lead to a 'Fail' verdict. The current price does not offer a margin of safety, despite the company's strong business model.

Educational interpretation generated by AI applying frameworks Warren Buffett documented in his shareholder letters and other public writings. Not a statement by Mr. Buffett or Berkshire Hathaway, and not investment advice.