Conviction / Primes and Integrators
TDG
TransDigm Group
conviction
TransDigm sells replacement parts for aircraft where it is often the only approved supplier, which gives it unusual pricing power, and sales rose 23 percent last quarter. Most of that comes from commercial airlines rather than defense, and the company carries a large amount of debt.
What we judge
The view on expected return from here, 0 to 100.
Whether the thesis could succeed without this company at all. This moves slowly, and only when the company's position genuinely changes.
What we measure
Facts from market data, not judgments.
| Price | $1,244.14 |
| 30-day move | -6.4% |
| Position in 52-week range | 36 |
| From the 52-week high | -15.0% |
| Average daily volume | $485.7M |
Why it is in the fund
Thesis
Sole-source aerospace components for military platforms; proprietary defense parts with pricing power across autonomous and manned systems.
Standing judgment
TransDigm monetizes sole-source spare parts on the installed base of legacy platforms, which makes it a leveraged bet that existing airframes keep flying, close to the inverse of what this fund is trying to own. Operationally excellent: Q3 FY26 sales +23% to $2,741M with 13% organic growth, commercial aftermarket +17%, and full-year guidance raised across sales, EBITDA and EPS. The offsets are a highly levered balance sheet and a valuation that already reflects a 149% run. Reconciling the 15/52 gap: TransDigm is peripheral to this fund's thesis and would be owned for return rather than because the thesis needs it, since the sole-source aftermarket franchise and its pricing power compound independently of whether autonomy displaces exquisite platforms.
What changed, and why
Every move in this number carries the reason it moved. A score does not change without new evidence.
| Date | Conviction | Change | Cause | Evidence |
|---|---|---|---|---|
| 2026-08-05 | 52 | +41 | first v3 judgment (v2 score was uninformative, see L-001): Best-in-class pricing power and another guidance raise, held back by leverage, a full multiple, and an end market that is mostly commercial rather than defense. | Fiscal 2026 Q3 net sales $2,741M, +23% ($504M), organic growth 13%; net income $540M, +10%; commercial aftermarket +17%; FY26 guidance raised by $150M sales, $100M EBITDA As Defined and $1.52 adjusted EPS at midpoint; FY26 sales guided $10,470-10,550M vs $8,831M in FY25 (+19%); FY26 organic growth 1 |
| 2026-07-29 | 11 | -6 | migrated from v2 (cause not recorded) | v2 `scores` row |
| 2026-07-24 | 17 | +6 | migrated from v2 (cause not recorded) | v2 `scores` row |
| 2026-07-21 | 11 | +7 | migrated from v2 (cause not recorded) | v2 `scores` row |
| 2026-07-20 | 4 | -13 | migrated from v2 (cause not recorded) | v2 `scores` row |
| 2026-07-08 | 17 | +3 | migrated from v2 (cause not recorded) | v2 `scores` row |
| 2026-07-07 | 14 | +3 | migrated from v2 (cause not recorded) | v2 `scores` row |
| 2026-06-21 | 11 | -9 | migrated from v2 (cause not recorded) | v2 `scores` row |
| 2026-06-20 | 20 | +13 | migrated from v2 (cause not recorded) | v2 `scores` row |
| 2026-06-19 | 7 | -10 | migrated from v2 (cause not recorded) | v2 `scores` row |
| 2026-06-19 | 17 | +3 | migrated from v2 (cause not recorded) | v2 `scores` row |
| 2026-06-12 | 14 | -13 | migrated from v2 (cause not recorded) | v2 `scores` row |
| 2026-06-12 | 27 | +10 | migrated from v2 (cause not recorded) | v2 `scores` row |