Stay Invested in Triumph Group (TGI) Stock: Here's Why

Triumph Group, Inc. TGI remains committed on enhancing shareholder value through a systematic share repurchase program and regular payment of dividends. As of Sep 30, 2017, the company had the authority to repurchase about 2.3 million shares.

Notably, Triumph Group’s effective share repurchase program will entitle it to reduce outstanding shares and boost the bottom line. The company paid $4 million as dividend in the first six months of fiscal 2018.

Meanwhile, its management laid out a strategic plan to stabilize and improve the company’s performance by accelerating organic growth and enhancing its financials. The strategic review also includes execution of planned restructuring actions which are expected to position the company for long-term competitiveness and growth.

However, the company’s earnings performance has not been impressive. Evidently, Triumph Group reported a negative earnings surprise in the last four quarters, with an average miss of 133.5%.

On a brighter note, the company’s Zacks Consensus Estimate for fiscal 2018 earnings is pegged at $2.51 per share, reflecting an annual improvement of 388.5%.

Across its four business units, Triumph Group pipeline of addressable opportunities continues to expand. Currently, the company is tracking over 539 active opportunities worth over $13 billion, a majority of which are in the later customer evaluation phase.

On the flip side, the company’s organic growth scenario has been dismal. Triumph Group’s total organic sales declined 12% during the second quarter of fiscal 2018 due to production rate reductions on previously disclosed programs along with the timing of deliveries on certain programs.

Moreover, Triumph Group’s stock has rallied 12.8% over a year compared with the broader industry’s gain of 36.6%.

 

The primary reasons behind this underperformance was the company’s poor organic sales growth along with volatility observed in energy and commodity prices that has been affecting its margin level.

Zacks Rank & Key Picks

Triumph Group carriesa Zacks Rank #3 (Hold).

A few better-ranked stocks in the same space are Aerojet Rocketdyne Holdings, Inc. AJRD, Curtiss-Wright Corporation CW and Raytheon Company RTN. While Aerojet Rocketdyne sports a Zacks Rank #1 (Strong Buy), Curtiss-Wright and Raytheon carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Aerojet Rocketdyne posted a positive average earnings surprise of 19.27% in the trailing four quarters. The company has a long-term earnings growth rate of 5.5%.

Curtiss-Wright delivered a positive average earnings surprise of 11.78% in the last four quarters. The company boasts a long-term earnings growth rate of 12.4%.

Raytheon delivered a positive average earnings surprise of 6.50% in the last four quarters. The company flaunts a long-term earnings growth rate of 8.4%.

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Triumph Group, Inc. (TGI) : Free Stock Analysis Report
 
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