TDG is a compelling buy; underperformance despite strong fundamentals (double-digit organic growth, rising margins) creates an attractive valuation, supported by recent share buybacks.

the increase in Boeing's production rate. Both of those are risk factors for aerospace aftermarket businesses like TransDigm, GE, Heico and others. We think those stocks are increasingly attractive.

Their valuations have become more appealing as this year's gone on and those stocks have underperformed.

They're not underperforming because earnings estimates are going down. They're not underperforming because um, you know, their their financial results are weak or because their revenues are declining.

The opposite is true in all of those cases. Investors are just fearful that higher oil prices are going to lead airlines to cut to cut their flight schedules, which means less demand for aftermarket services the likes these companies provide.

So, I think that demand for aftermarket services is durable. I think these companies are going to keep growing and growing at an above GDP rate. And they also have pricing power because the aerospace industry, you know, has significant regulations on a part-by-part basis and it's pretty difficult for airlines to toggle from one to another.

So, I think the outlook for these businesses is appealing. I think the valuation has gotten even more attractive and several of these companies are really allocating capital in a shareholder friendly manner.

TransDigm has been acquiring over the last couple years including in the last few months and the same is true for Heico as well. Yeah, first of all, the business is growing double-digits organically.

Second, their margin has been increasing lately. So so profits growing even faster than revenue. Third, valuation has come down. The stock has underperformed materially in the last year and the stock today trades at a at an attractive valuation.

And the company's capital allocation process is very shareholder friendly. If they're unable to find appealing acquisition candidates, they either pay special dividends to shareholders or they buy back the stock.

They've actually been buying back the stock recently, which I think is an important indicator for shareholders.

In the past when TransDigm has bought back their stock, it's been because it's attractively valued and the stock has done very well over the following year or two. We're in one of those periods right now where the company's buying back the stock and I think it's a compelling buy for investors today.