What Makes TransDigm (TDG) a Lucrative Investment?

ClearBridge Investments, an investment management company, released its “ClearBridge Global Growth Strategy” first quarter 2024 investor letter. A copy of the letter can be downloaded here. During the first quarter, global equities continued to move higher fueled by improving investor sentiment, better economic data in the U.S., rate cuts beginning in Europe, and confidence in the Japanese economy. The Benchmark MSCI All Country World Index rose by 8.20%, driven by strong performance in the U.S. The S&P 500 Index surged by 10.56%, while the MSCI EAFE Index increased by 5.79%. Growth stocks saw a strong increase at the beginning of the year, buoyed by the expectation of a continued decrease in bond yields from their 2023 high. Against this backdrop, the strategy outperformed its benchmark for the quarter. In addition, please check the fund’s top five holdings to know its best picks in 2024.

ClearBridge Global Growth Strategy highlighted stocks like TransDigm Group Incorporated (NYSE:TDG) in the first quarter 2024 investor letter. Headquartered in Cleveland, Ohio, TransDigm Group Incorporated (NYSE:TDG) is an aircraft components manufacturer and supplier. The one-month return of TransDigm Group Incorporated (NYSE:TDG) was -1.59%, and its shares gained 46.80% of their value over the last 52 weeks. On June 26, 2024, TransDigm Group Incorporated (NYSE:TDG) stock closed at $1,300.83 per share with a market capitalization of $72.792 billion.

ClearBridge Global Growth Strategy stated the following regarding TransDigm Group Incorporated (NYSE:TDG) in its first quarter 2024 investor letter:

"U.S. aircraft parts manufacturer TransDigm Group Incorporated (NYSE:TDG) was our largest addition. TransDigm is a steady compounder with strong pricing power coming from regulatory barriers that limit the number of competitors and due to its proprietary intellectual property, which makes it a sole supplier of many certified aircraft parts. We believe the company will see long-term duration of growth ahead as it benefits from the expansion of the aerospace aftermarket and acquisitions in this still-fragmented space."

An aerial shot of a modern commercial jetliner in flight, its wings glinting in the sunlight.

TransDigm Group Incorporated (NYSE:TDG) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 78 hedge fund portfolios held TransDigm Group Incorporated (NYSE:TDG) at the end of the first quarter which was 65 in the previous quarter. During the fiscal second quarter of 2024, TransDigm Group Incorporated's (NYSE:TDG) organic growth rate was 16.1%, with contributions from all market channels. While we acknowledge the potential of TransDigm Group Incorporated (NYSE:TDG) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

We discussed TransDigm Group Incorporated (NYSE:TDG) in another article and shared Mar Vista Focus strategy's views on the company. In addition, please check out our hedge fund investor letters Q1 2024 page for more investor letters from hedge funds and other leading investors.

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Disclosure: None. This article is originally published at Insider Monkey.