Key Takeaways
- • Dan Loeb's Third Point raised its TransDigm (TDG) stake 216% in the quarter ended June 30, to 79,000 shares worth $105 million, according to its 13F filed Aug. 14.
- • Edgewood Management, which manages $22 billion, cut its TransDigm stake 55% in the same quarter, to 278,240 shares worth $371 million, per its 13F filed Aug. 13.
- • TransDigm traded at 26x forward earnings versus a five-year average of 33x, while analysts expect normalized EPS to rise each year through fiscal 2028, from $37.33 in fiscal 2025 to $55.88.
- • The average analyst price target fell to $1,414, its lowest level in the past year, though still 18% above the $1,197 Friday close cited in the article.
- • Both funds' 13Fs for the quarter ended Sept. 30 are due by Nov. 16, and TransDigm's fiscal Q4 report was expected within days of the article.
Summary
Third Point, which manages $29 billion, more than tripled its TransDigm position in the quarter ended June 30, ending with 79,000 shares. That position represented 2.3% of its 13F holdings and was its 18th-largest. Edgewood Management moved the other way, cutting its share count 55% to 278,240 shares. Even after the reduction, TransDigm remained 3.8% of Edgewood's 13F holdings and its 14th-largest position, a larger weighting and dollar bet than Third Point's.
Since June 30, TransDigm reported fiscal Q3 results on Aug. 4, with sales rising 23% to $2.74 billion and double-digit growth across its three main markets. Commercial aftermarket sales grew 17%, and the company repurchased about $1.0 billion of its stock in the quarter. It also raised its fiscal 2026 EBITDA As Defined midpoint by $100 million to $5.52 billion.
Valuation, according to the article's TIKR data, has compressed. The shares trade at 26x forward earnings, near a 23x low reached Sept. 17, and below the five-year average of 33x. Analyst price targets have moved lower, from $1,558 a year earlier and a January peak of $1,622 to $1,414. The highest target among the 23 covering analysts is $1,745, and the lowest is $1,100.
The article's author argues that Third Point holds the stronger position, citing rising guidance, expected EPS growth through fiscal 2028, and a multiple below its historical average. The main risk identified is further target cuts. The stock was down 10% from its June 30 price at the time of writing. The author notes that results from TransDigm's fiscal Q4 report and both funds' 13Fs for the quarter ended Sept. 30 will indicate whether Third Point kept adding and whether Edgewood continued selling.
Since June 30, TransDigm reported fiscal Q3 results on Aug. 4, with sales rising 23% to $2.74 billion and double-digit growth across its three main markets. Commercial aftermarket sales grew 17%, and the company repurchased about $1.0 billion of its stock in the quarter. It also raised its fiscal 2026 EBITDA As Defined midpoint by $100 million to $5.52 billion.
Valuation, according to the article's TIKR data, has compressed. The shares trade at 26x forward earnings, near a 23x low reached Sept. 17, and below the five-year average of 33x. Analyst price targets have moved lower, from $1,558 a year earlier and a January peak of $1,622 to $1,414. The highest target among the 23 covering analysts is $1,745, and the lowest is $1,100.
The article's author argues that Third Point holds the stronger position, citing rising guidance, expected EPS growth through fiscal 2028, and a multiple below its historical average. The main risk identified is further target cuts. The stock was down 10% from its June 30 price at the time of writing. The author notes that results from TransDigm's fiscal Q4 report and both funds' 13Fs for the quarter ended Sept. 30 will indicate whether Third Point kept adding and whether Edgewood continued selling.
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