Author Topic: TDG - Transdigm  (Read 138472 times)

Jurgis

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Re: TDG - Transdigm
« Reply #70 on: April 02, 2015, 12:58:05 PM »
I'd love to buy stock in this company. However, it is expensive.

You are somewhat right that you can rationalize the expensiveness and make a case for OKish returns going forward.

But then why does management issue special divvies and not share buybacks? Assuming they are smart - and we all think so I believe - they probably do this because they believe the shares to be overvalued.

Great company, high price. But, yes, waiting so far meant lost opportunity.
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Liberty

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Re: TDG - Transdigm
« Reply #71 on: April 02, 2015, 01:14:17 PM »
Also, I recently wrote about TDG. Would definitely be interested to hear critiques on my writing. I'm trying to write more now that I have more time and it is certainly not a strength just yet. :)
http://seekingalpha.com/article/3042866-transdigm-when-is-a-large-moat-worth-more-than-30x-earnings

So that was you! I saw it, but only had time to skim it. Seemed like a good overview.
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Liberty

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Re: TDG - Transdigm
« Reply #72 on: April 02, 2015, 01:22:51 PM »
But then why does management issue special divvies and not share buybacks? Assuming they are smart - and we all think so I believe - they probably do this because they believe the shares to be overvalued.

Great company, high price. But, yes, waiting so far meant lost opportunity.

They did do some buybacks recently, but they've mentioned previously that they like special dividends because they can get a return of capital treatment for most of them, so taxes aren't too bad, and buybacks have a high execution risk. Their stock isn't exactly standing still, so if you want to do a return of capital  of the size that they've been doing (multiple billions) via buyback, you'd need to buy a massive amount and you'd probably drive the price up quite a bit. I also don't think they think their stock is significantly undervalued. They'd probably do bigger buybacks if that was the case.
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Liberty

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Re: TDG - Transdigm
« Reply #73 on: April 02, 2015, 01:45:21 PM »
New CFO:

http://www.transdigm.com/phoenix.zhtml?c=196053&p=irol-newsArticle&ID=2032118

Gotta say, the Cliffs background is a bit scary, but I'm sure they vetted him well.
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loganc

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Re: TDG - Transdigm
« Reply #74 on: April 02, 2015, 04:36:29 PM »
New CFO:

http://www.transdigm.com/phoenix.zhtml?c=196053&p=irol-newsArticle&ID=2032118

Gotta say, the Cliffs background is a bit scary, but I'm sure they vetted him well.

Quite the disparity between CLF and TDG on the business quality spectrum.  What is your thinking about the COO and CFO retirements happening in such quick succession?       

Liberty

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Re: TDG - Transdigm
« Reply #75 on: April 02, 2015, 07:31:54 PM »
New CFO:

http://www.transdigm.com/phoenix.zhtml?c=196053&p=irol-newsArticle&ID=2032118

Gotta say, the Cliffs background is a bit scary, but I'm sure they vetted him well.

Quite the disparity between CLF and TDG on the business quality spectrum.  What is your thinking about the COO and CFO retirements happening in such quick succession?     

We'll see. The guy was also a partner at KMPG. It's possible to find very talented people in all kinds of companies. Tim Cook worked at Compaq...

If I remember correctly, the COO is staying on the board, and the CFO is sticking around for almost two years too (until end of 2016), so they're not exactly jumping ship in haste. I think it could be kind of a cohort effect, people who have been with the company for a long time (I'd have to dig the dates up, but if they've been there since the early 90s, that's a pretty nice run) and reaching retirement around the same time.

It's certainly something to keep an eye on. But they seem to have a strong management culture and a well established model that is teachable, so hopefully this is a smooth transition.
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Jurgis

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Re: TDG - Transdigm
« Reply #76 on: April 03, 2015, 11:46:21 AM »
I don't think the COO/CFO leaving is a smoking gun, but I do think that there is a risk for the new people to start bending the rules which might hit a levered company much more than unlevered one if something blows up.

It's not a significant risk: I agree with Liberty that new people might be great and they might integrate well. But something to keep in a corner of the mind for investors.
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Liberty

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Re: TDG - Transdigm
« Reply #77 on: April 30, 2015, 04:53:37 PM »
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loganc

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Re: TDG - Transdigm
« Reply #78 on: April 30, 2015, 07:19:30 PM »
Is there any business in this space that is close to TDG in terms of business mix exposure to aftermarket?   

Liberty

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Re: TDG - Transdigm
« Reply #79 on: May 01, 2015, 03:46:17 AM »
Is there any business in this space that is close to TDG in terms of business mix exposure to aftermarket?   

Close? Not that I've  found.
"Most haystacks don't even have a needle." |  I'm on Twitter  | This podcast episode is a must-listen