Astronics Corp (NASDAQ:ATRO)

Things look rosy for the company right now, but I think it’s very important to keep the cyclical nature of the industry in mind. As CEO Gundermann himself put it, “looking back at 2014, it was obviously a watershed year for the company. It was a lot of things going right in the right direction… and it’s not one of those years that comes along every year, but it’s sure fun when it does.”

In other words, don’t expect every year to be like 2014. I suspect that the company will continue to do fine for the next couple of years at least — management is very bullish about 2015 — but as it gets larger it will become increasingly exposed to both the industry’s cycles and to competition as it grows out of its traditional niches (and competitors become more aware of the profitability of those niches). It already is facing some margin pressure in certain categories, and is projecting consolidated revenue growth of only 7.5% at the midpoint of its guidance (though the range is quite wide, and I’d expect it to come in a bit higher).

If one is comfortable with cyclicals in general, and the airline industry in particular, then I think Astronics could provide a nice ride over the next couple of years — especially if the global economy improves, lending a boost to the business jet line. But eventually the music will stop.