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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Transdigm Group Incorporated (XNYS:TDG) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
TDG
Name:
TRANSDIGM GROUP INCORPORATED (XNYS:TDG)
Sector:
254.00M
Industry:
Aerospace & Defense
CEO:
Mr. Kevin Stein
Total Employees:
13,300
Our Technological Advancement Rating
Our Rating:
D
Technological advancement compared to industry is -121.54% lower
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF TRANSDIGM GROUP INCORPORATED(TDG) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND AEROSPACE & DEFENSE INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
601.2
One Month Price Target:
$606.
Six Month Price Target :
$629.99
Likely Price in One Year's Time:
Ticker:
$658.79
Likely Trading Range Today Under (Normal Volatility)
$598.35
Price Upper limit ($) :
$604.73
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$562.94
This week:
$515.64
This month :
$430.08
Other Primary facts
Market Cap:
32.62B
Market Cap Classification:
Large Cap
Number of Shares
IPO Date:
54.23M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
24.4%
-21.97%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$778.75
$697.27
$423.65
$505.13
Medium risk (<10%) entry points
Buy Call
Sell Call
$670.75
Buy Put:
Sell Put:
$653.36
$531.42
$549.04
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
TDG
Sharpe Ratio:
1.53%
Comparison:
TDG, is amongst the top 60% stocks with highest risk-adjusted returns
Sharpe ratio is 41.32% higher than the industry
& is -32.74% lower than the market/S&P 500 average
Average Returns/Yield of
TDG
Daily returns:
0.06%
Weekly returns:
0.28%
Monthly returns:
1.14%
Yearly returns:
10.44%
Comparison of returns:
Average annual returns/yield (last 3 years) is 30.51% above industry average
Classification:
TDG, is amongst the top 40% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.99
Statistical test of Returns:
TDG has not yielded statistically significant higher returns when compared to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
3.13%
Weekly Volatility:
6.99%
Monthly Volatility:
13.98%
Yearly Volatility:
48.44%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
1.39%
Volatility in last five trading days has been -55.58% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-6.36%
Weekly VaR:
-14.23%
Monthly VaR:
-28.46%
How Much Can the price of
TDG
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-25%
Worst case (decline):
>85%
This translates to price declining to:
$453.78
This translates to price declining to:
$90.18
Severe Crash Probability
Risk of crash in next 6/12 months: Medium (<50%)
What is Value at Risk (VaR)?
Risk Fundamentals
TDG is a 100.89% riskier investment compared to the market/S&P 500 & is 72.10% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is -0.99% below industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
TDG
Beta in relation to market/S&P 500--1.43
Expected beta in 1 year's time:
0.824
Expected beta in 3 year's time:
1.165
Unlevered (debt free) Beta:
-0.253
Beta in relation to Nasdaq (XNAS):
0.949
Beta in relation to all global stocks::
0.959
Beta Comparison & Analysis
Beta of competitors/peers::
1.139
Beta is 25.13% higher than peers
Average Industry Beta:
1.007
Beta is 41.56% above industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
-
-
Alpha provided | Alpha Analysis
Alpha provided:
0.007
Alpha is 80.97% above industry average alpha yield
Alpha is 45% compared to market & is healthy
Analysis of Cost of Capital of
TDG
Equity cost of capital:
0.129
Equity cost of capital is 28.53% above industry mean WACC
Unlevered (without debt) cost of capital:
-2.29%
Before-tax cost of debt:
5.32%
After-tax cost of debt:
4.20%
Overall debt rating:
Lower BB medium grade (Fifth highest grade)
Weighted average cost of capital (WACC):
4.20%
WACC is -50.42% below industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$92.52
Revenue growth rate per share of (3Y):
-12.42
Annual revenue growth rate is -77.44% below industry average
EPS:
$14.36
Expected Annual growth rate of EPS (3Y):
-2.65%
Expected future EPS growth rate is -135.00% lower than the Aerospace & Defense industry
Free cash flow (FCF) per share:
$13.54
Balance sheet equity growth per share: 23.77%
Equity growth rate per share is -13783.36% lower than the industry
Debt per share
$357.48
EBITDA per share
$42.32
Valuation Analysis Today of
TDG
P/E Ratio:
46.08
P/E Ratio of Competitors/Peers:
29.37
P/E ratio is 56.91% higher than main peers & is -1.94% lower than the industry
Stock price/value with industry average P/E ratio: $674.81
TDG is -10.91% undervalued if valued using industry average P/E ratio
-
-
P/S (Price to Sales ratio):
6.5
Price to sales ratio is -31.66% below the industry mean
P/B (Price to book value ratio):
-12.42
Price to free cash flow: 44.40
Price to free cash flow ratio is -21.84% lower than the industry
Net income growth rate (3Y):
-32.36%
Net income growth rate is -1168.85% lower than the industry average net income growth rate
Dividend Analysis
Dividend payout rate: 5.18%
Dividend yeild: 5.41%
Previous Dividend: $32.50
Previous adjusted dividend: $32.50
Previous Dividend: $32.50
-
-
Average dividend payment (long-term): $32.50
-
-
-
-
Previous dividend payment date: 01/07/2020
Previous dividend record date: 30/12/2019
Previous dividend declaration date: 20/12/2019
Dividend History:
2019-12-27--$32.50
--$0.00
--$0.00
--$0.00
--$0.00
--$0.00
-
In-depth Debt & Leverage Analysis
Debt to equity ratio:
-736.35%
Net debt to equity ratio:
-569.73%
Debt to assets ratio:
100.76%
Net debt to assets ratio:
77.96%
Debt-to-asset ratio is 87.76% above industry average
Ability to repay debt:
Interest coverage ratio:
2.18
Interest coverage ratio is -73.82% less than industry average
Looking forward:
Debt growth rate:
0.00%
-
Debt repayment rate in last quarter: 1.12%
Analysis of Key Statistics
Correlation of price movement with the market:
0.642
Statistical significance of correlation:
TDG has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.541
Stock price is 18.54% more correlated with the market, compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.541
Correlation of price movement with Nasdaq (^IXIC):
0.024
Covariance of price movement with the market:
0.044
Kurtosis
13.511
Returns have severe fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are considerably more likely, compared to assets with normally distributed returns
Skewness of returns:
0.119
Returns are, approximately, symmetrical
Fundamental Analysis & Dupont Analysis of
TDG
Gross Profit Margin Ratio:
221%
Operating Profit Margin Ratio:
39.00%
Operating profit margin is -107.84% lower than the industry
Net Profit Margin Ratio:
221%
Effective Tax Rate:
9.86%
Effective tax rate is -58.46% lower than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
-33.73%
Return on equity (ROE) is -525.81% lower than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
4.61%
Return on assets (ROA) is 8.06% higher than the industry
Financial Leverage:
-131.8x
Current Ratio:
5.06
Current ratio is 59.78% above industry average
Cash Conversion Cycle (days):
64.5
Cash conversion cycle is -88.80% below industry average
The remaining useful life of property plant & equipment is: 0.0 years
Stock based compensation to net income ratio:
4.17%
In-depth Efficiency Analysis
Revenue generated per employee:
377.3K
Each employee generates 9% more revenue than industry average revenue per employee
EBITDA generated per employee:
172.6K
Each employee generates 361% more EBITDA than industry average revenue per employee
Profit generated per employee:
66.8K
Each employee generates 938% more net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
19.1K
Each employee generates -923% less free cash flow than industry average revenue per employee
Assets/Capital per employee
922.6K
Each employee generates -923% less free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
-
-
Competitors/Peer firms of
TDG
OTIS WORLDWIDE CORPORATION (XNYS:OTIS)
ROCKWELL AUTOMATION, INC. (XNYS:ROK)
WASTE CONNECTIONS, INC. (XNYS:WCN)
CUMMINS INC. (XNYS:CMI)
AMETEK, INC. (XNYS:AME)
EQUIFAX INC. (XNYS:EFX)
STANLEY BLACK & DECKER, INC. (XNYS:SWK)
PARKER-HANNIFIN CORPORATION (XNYS:PH)
REPUBLIC SERVICES, INC. (XNYS:RSG)
Current Analyst Ratings
Strong buy�21%
Buy�29%
Hold�21%
Sell�4%
Strong sell�0%
Overall analyst sentiment is: Buy
Income Statement
Period:
TTM
Date:
4/2/22
Revenue:
5.02B
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
2.24B
2.78B
-
660.00M
660.00M
-
141.00M
801.00M
-
1.05B
256.00M
2.30B
1.96B
888.00M
984.00M
97.00M
888.00M
Statement of Cash Flow
Date:
Period:
65.00M
Differed Income Tax :
-
Stock Based Compensation :
37.00M
Change in Working Capital :
19.00M
Accounts Receivables:
117.00M
Other Working Capital:
- 6000.00K
Other Non-Cash Items:
- 5000.00K
Net Cash Provided by Operating Activities:
279.00M
Investments in PP&E:
-
Net Acquisitions:
-
Purchases of Investments:
-
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
1/1/22
2022
Q1
4.81B
-
4.81B
673.00M
1.22B
270.00M
6.97B
794.00M
8.57B
2.75B
-
-
157.00M
12.27B
-
19.24B
212.00M
426.00M
-
-
740.00M
1.38B
19.39B
599.00M
20.49B
-
21.87B
1.00M
- 3545000.00K
- 200000.0K
-
January 1, 2022 at 7:00:00 AM
3.04B
- 2633000.00K
19.24B
-
19.81B
15.0B
-
- 25000.00K
- 25000.00K
- 219000.00K
-
-
- 46000.00K
40.00M
- 225000.00K
- 3000.00K
26.00M
4.81B
4.79B
279.00M
- 25000.00K
254.00M
Our Proprietary Portfolio Rating
Our Rating:
D
Price Forecast/Expected Price in Next 5 Years of
TDG
2023
2024
2025
2026
2027
$675.43
$740.13
$811.02
$888.71
$973.84