Triumph Group Inc. (TGI) designs and manufactures a broad portfolio of aerostructures, aircraft components, and systems for the aviation industry. It serves a worldwide customer base of players in the commercial, business, and military markets.
Although the company took a hit during the pandemic, the long-term outlook for the commercial aerospace industry is bullish due to the air travel demand. In fact, the company is seeing sales growth from Airbus commercial programs. Plus, TGI has a strong presence in the U.S. defense market.
The company had $237 million in cash as of the most recent quarter compared with only $5 million in short-term debt. However, TGI has a negative profit margin. Sales have been down an average of 18.3% over the past three years and down 33.5% over the last year.
But analysts expect earnings to rise 2,133.3% for the year, which has led to a Growth Grade of B in our POWR Ratings service. The stock appears overvalued at its current price with a forward P/E of 37.59. TGI’s stock is down for the month, but up 55.7% for the year. It has been in a long-term uptrend since November as seen in the chart below.
Take a look at the 1-year chart of TGI below with the added notations:
An ascending triangle pattern has formed in the chart of TGI. After falling below a previous $20 support mark back in July, TGI has rallied back up to hit that same $20 level as resistance multiple times. Along the way, the stock has also formed a trendline of support.
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Eventually, one of those two lines will break. A long trade could be entered on a break above $20 with a stop placed under the point of entry. However, if support were to break, lower prices could follow instead.
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TGI shares were trading at $19.66 per share on Friday morning, up $0.11 (+0.56%). Year-to-date, TGI has gained 56.53%, versus a 19.91% rise in the benchmark S&P 500 index during the same period.
About the Author: Christian Tharp
I am an expert stock market coach having helped over 4000 beginner and advanced traders & investors from around the world take control of their financial futures. I also write stock market related articles for the Adam Mesh Trading Group and Yolo Publishing.
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