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One of the Widest Moats in Aerospace Is On Sale

Transdigm's revenue and profit growth are likely to slow, but the recent sell-off in its shares has been overdone.


Chris Higgins: Transdigm manufactures products for electronic, fluid, power, and motion control onboard aircraft. It also supplies products used in aircraft cabin structures, lighting, and a host of other applications. If you've taken a commercial airline flight, you've been on aircraft with their products onboard.

The company has one of the widest moats of any aerospace company we cover thanks to sticky aftermarket sales that account for over 70% of its profits. Once the company is on an aircraft, it stays on it for decades. And due to stringent FAA certification requirements plus the high cost of failure onboard an aircraft, Transdigm consistently extracts premium pricing from aircraft manufacturers and airline customers.

Chris Higgins does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.