Aerospace industry supplier Transdigm Group's stock could be in a launch area for a breakout. It's been trading in a narrow range, near its all-time high. And as Northrop Grumman, Lockheed and other defense contractors ramp up production amid Vladimir Putin's Russia war on Ukraine, Transdigm could see outsize gains. On Monday, the Relative Strength (RS) Rating for Transdigm stock edged up to 73, from 70 the prior trading session.
Transdigm Stock Improving; Needs Work
The new 73 RS Rating means Transdigm stock has outperformed 73% of all stocks in IBD's database. It's a good but not great rating. Research shows that stocks that go on to make the biggest gains often have an RS Rating over 80 as they begin their largest climbs. See if Transdigm can continue to rebound and clear that threshold.
Transdigm supplies aerospace parts and systems to defense contractors and commercial aircraft makers. It produces a variety of basic parts, systems and other components, including actuators, controls, ignition systems, gear pumps and other components.
Among its other principal ratings Transdigm has an 81 EPS Rating, of 99. Its 83 Composite Rating puts it in the top 17% of stocks on the group of five top ratings IBD uses. Meanwhile, the C+ Accumulation/Distribution Rating shows that slightly more institutional investors are buying its shares than selling.
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Transdigm stock has more than tripled from a 200.06 intraday low in late March 2020 amid the Covid market crash to 622.68 Monday afternoon, up 1% for the day. It's held near its all-time high 688.03 set on June 24 last year. It's now working on a cup without handle pattern with a 684.82 entry. See if it can break out in heavy volume.
Transdigm Consistently Reports Strong Profit Growth
Transdigm was a Steady Eddie profit-growth performer long before Russia's invasion of Ukraine. Last quarter the Cleveland-based company reported a 50% jump in earnings per share to $3.86. The prior three stanzas it reported 116%, 47% and 52% year-over-year growth. Sales last quarter grew 11% to $1.33 billion.
Transdigm stock holds the No. 16 rank among its peers in the Aerospace/Defense industry group. Espey Manufacturing & Electronics and Heico are among the group's highest-rated stocks.
When looking for the best stocks to buy and watch, one factor to watch closely is relative price strength.
This exclusive Relative Strength Rating from Investor's Business Daily tracks market leadership with a 1 (worst) to 99 (best) score. The rating shows how a stock's price behavior over the trailing 52 weeks stacks up against all the other stocks in our database.
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