“Triumph Group, Inc. (TGI, NYSE) designs, engineers, manufactures, repairs, overhauls and distributes aircraft components. ... We project that Triumph will strongly outperform the market over the next 6 to 12 months. This projection is based on our analysis of three key factors that influence common stock performance: earnings strength, relative valuation, and recent price movement. ... Earnings strength is very positive. ... While Triumph Group’s earnings have increased from $5.07 to an estimated $6.22 over the past 5 quarters, they have shown strong acceleration in quarterly growth rates when adjusted for the volatility of earnings. This indicates an improvement in future earnings growth may occur. Nearly 40 years of research have shown that the change in the growth of earnings per share is an important factor that drives stock price performance. ...
“Relative valuation is positive. Triumph Group’s operating earnings yield of 7% ranks above 76% of the other companies in the Ford universe of stocks, indicating that it is undervalued. ... Price movement is very positive. Triumph Group’s stock price is up 83.5% in the last 12 months, up 23% in the past quarter and up 2.3% in the past month. This historical performance should lead to above-average price performance in the next one to three months. Strong Buy.”
Richard Segarra, CFA, Ford Equity Research Report, 12/3/10
