Triumph Group, Inc. (NYSE:TGI)

CAPS Rating: 5 out of 5

The Company through its subsidiaries, engages in the design, engineering, manufacture, repair, overhaul, and distribution of aircraft components.

Recs

3
Player Avatar Long1CPA (47.29) Submitted: 7/1/2008 11:39:47 AM : Outperform Start Price: $22.94 TGI Score: +128.79

Someone can tell me if my macro-economic thinking is off here, but I see TGI as a strong buy below 50. Here's why: TGI has been sold off pretty much in line with the rest of the aerospace and defence sector. My contrarian point of view is that the higher gas prices go, the better it will be for TGI's earnings. As prices rise more and more airlines are begining to outsource repair and maintenance. Additionally, as prices rise airlines stop buying planes (See BA). While 30% of TGI's commercial repair business comes from Boeing this is not on NEW planes. Airlines fleets will be aging (specifically the workhorse 737s) and needing increased repairs. As airlines merge they will look to simplify operations and cut costs. My guess is they will start cutitng r&M departments. TGI also has some government contracts which will be used to 'smooth earnings' and meet estimates if the company so desires. If there is a better way to play the aerospace R&M sector please let me know.

Member Avatar rastko (64.83) Submitted: 11/25/2010 9:58:33 AM
Recs: 0

i agree.

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