Could TransDigm be the Valeant of the Aerospace Industry?

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Wall Street:  Be Careful!  President Trump has become to Aerospace what Hillary was to Pharmaceuticals

 

President Trump has promised to end the long-standing, infuriating tradition of “sticking the US Government with tab”.  He has already made lowering prices for military aircraft a pillar of his transition into office.

President Trump has already met with the both Boeing and Lockheed Martin, who have promised to lower the prices for Air Force One and the F-35 fighter jet program.  These lower prices will no doubt trickle down to subcontractors.

While Boeing and Lockheed Martin have been the “poster children” of this policy initiative, everyone in the aerospace industry knows that one company stands out when it comes to egregious price increases foisted on the government:

TRANSDIGM  (NYSE:TDG)

TransDigm’s business model is to aerospace as Valeant was to the pharmaceutical industry. TransDigm acquires airplane parts companies (over 50 in total), fires employees, and egregiously raises prices.  This business model has made them a dominant supplier of airplane parts to the aerospace industry while burdening its balance sheet with sky-high debt load… sound familiar?

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