TDG — tear sheet

The engine's final decision rates TransDigm Underweight — a reduction stance it keeps short of a full sell — resting on capital-structure and valuation evidence its risk review treats as un-rebutted: net debt rising from $22.2 billion to $30.7 billion in twelve months (about 4.9x to 6.1x EBITDA), interest expense compounding +29.5% year over year with trailing-twelve-month interest near $1.89 billion against $1.93 billion of trailing free cash flow, and EPS growth (+10.9%) at half of EBITDA growth (+19.8%) as margins dilute. At roughly 18.3x EV/EBITDA and ~34x earnings, the engine assesses the multiple as premium and rate-sensitive. Flow shows no reversal: QuantOrb's MFI reads 40.08 with signal None for the 2026-09-21 session (FACTS). The engine still credits the un-disputed business — ~90% proprietary sales and ~55% aftermarket per the SEC 10-K filed 2025-11-12 — plus September capitulation signs (a September 16 band-pierce and an 809k-share September 18 reversal day, per its review), keeping the assessment above Sell. Sources: FACTS; FILING (SEC 10-K, filed 2025-11-12); engine outputs (risk judge decision).

Source: SEC 13F-HR holdings (as of 2026-03-31) via quantorb filers data — quarter-end snapshots, statutory lag up to 45 days

Quarter-end 13F-HR snapshot for TDG as tracked in the quantorb filers dataset (5 institutional filer rows on file; positions as of 2026-03-31, a quarter-end snapshot subject to the statutory 13F reporting lag of up to 45 days). Quarter-over-quarter share changes where the dataset carries them:

This is the dataset's tracked top-holder snapshot, not an exhaustive list of 13F filers; it is a periodic regulatory disclosure, not real-time portfolio data.

Management's quarterly press release is absent: the corpus states no 8-K Item 2.02 filing was found in the lookback window, so results commentary and guidance language from that source are not available in provided documents. Management's FY2025 10-K (filed 2025-11-12) discloses an estimated ~90% of fiscal 2025 net sales from proprietary products, ~55% from the aftermarket consumed over aircraft lives generally estimated at 25–30 years, and an estimated product life cycle above 50 years; the MD&A describes a leading global designer, producer and supplier of highly engineered proprietary aerospace components and cautions actual results could differ materially on risks and uncertainties. Catalysts visible in the corpus: the early-November Q4 FY2026 print (first aftermarket data against the duration thesis and first quantification of a $2.16 billion June acquisition's debt, per the engine's review), a Melius Research downgrade cluster questioning aftermarket growth, defense revenue +11% in fiscal Q3 2026 with bookings and backlog (per the engine's news report), and RBC-flagged near-term sentiment headwinds. Sources: FILING (SEC 10-K, filed 2025-11-12); EIGHTK; engine outputs.

The engine's risk review flags leverage first: net debt rose from $22.2 billion to $30.7 billion in twelve months (about 4.9x to 6.1x EBITDA), with quarterly interest of $514 million compounding +29.5% year over year and trailing-twelve-month interest near $1.89 billion approaching $1.93 billion of trailing free cash flow. The multiple is premium and rate-sensitive (~18.3x EV/EBITDA, ~34x earnings, ~3% FCF yield) as margins dilute quarter over quarter. A Melius Research downgrade cluster questions whether robust aftermarket growth is ending, aimed at the ~55% aftermarket revenue base disclosed in the 10-K. The engine cites working-capital warning lights: inventory +24.2% and receivables +19.7%. The tape is unconfirmed: QuantOrb's MFI reads 40.08 with signal None on 2026-09-21 (FACTS), RSI 38.89 sits below its repair zone, and price remains in a 14-month downtrend. Per the quantorb 13F dataset, tracked institutional holdings are mixed and lagged — net -125K shares across five filers as of 2026-03-31. Sources: FACTS; FILING (SEC 10-K, filed 2025-11-12); THIRTEENF; engine outputs (risk review).