Shares of engineered aircraft components provider Transdigm Group Inc. (TDG) have gained 11.5% over the past 12 months. TDG’s recent first-quarter performance fell short of expectations on both the revenue and earnings fronts.
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On the back of organic growth, revenue increased 7.8% year-over-year to $1.19 billion, but lagged estimates by $42 million. Earnings per share at $3 missed consensus by $0.17. Management noted a continued improvement in global air traffic and a significant improvement in commercial aftermarket bookings as some of the positives for the company.
With these developments in mind, let us take a look at the changes in TDG’s key risk factors that investors should know.
Risk Factors
According to the TipRanks Risk Factors tool, Transdigm’s top risk category is Finance & Corporate, contributing 8 of the total 28 risks identified for the stock, compared to a sector average of 16 risk factors under the same category.
In its recent report, the company has added one key risk factor under the Finance & Corporate risk category.
TDG highlighted the developments in its stock buybacks. In November 2017, TDG had authorized a stock buyback program not exceeding $650 million. However, no purchases were made in the recent first quarter, and as of January 1, 2022, the remaining amount under this program was $631.1 million.
On January 27, 2022, TDG authorized a new stock buyback program not exceeding $2.2 billion. This program replaces the old buyback program and is subject to any restrictions specified in TDG’s credit agreement and indentures governing the company’s existing notes.=
Hedge Fund Activity
According to TipRanks data, the Wall Street’s top hedge funds have decreased holdings in Transdigm by 4.9 million shares in the last quarter, indicating a very negative hedge fund confidence signal in the stock based on activities of 4 hedge funds.
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