Inside Scoop: Insider Buying at Transdigm
Dec 12, 2019
Transdigm is one of the best performing companies in the Titan composite this year, up +67% YTD.
Many investors might look at its one-year chart and find it difficult to buy into the surge.
"How do I know now is the right time?"
"There's got to be a correction coming soon, right?"
"Why didn't I do this a year ago?"
These are all natural points of friction, and the managing the complexity around all these decision points for investors is a core goal for us here at Titan.
However, such frictions obviously were not major concerns for Transdigm's legal head Halle Terrion, who, along with a number of other senior executives at the company have been slowly buying shares in TDG throughout the year.
In Halle's case, she just disclosed a recent ~$300,000 purchase of TDG stock at an average cost of $571.03. TDG closed today at $567.58, about ~1% lower than this cost basis. When TDG first entered the Titan portfolio mid last year, it was trading around ~$325.
As we've highlighted previously, we believe insider purchases are a strong indication of management confidence.
Management teams get paid in stock fairly regularly and also sell that stock fairly regularly in order to monetize their compensation.
But when they spend their own cash salary to buy more stock than their compensation plan already gives them, that tends to be a notable event and a strong sign of internal conviction.
Stay tuned - we'll be sure to let you know if we spot any other interesting insider purchases across our radar.
Cash Management
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