Friday, September 11, 2009

New stock rating (TDG)

AlphaNinja -We used to have "Buy" and "Sell" ratings from Wall Street analysts. It's since expanded to "Neutral," "Hold," Long-Term Buy," and a hundred other fun monikers.

My favorite today is from the research department at Soleil, with a new rating for aerospace firm Transdigm Group (TDG) of "Gradually Accumulate."

I'm not even trying to be a jerk - in fact this rating suggests that they like a name but would "ease" into the stock as they don't find it to be a screaming bargain. Just sharing the complicated business of stock ratings...

Based on estimates for 2010 earnings, Transdigm looks set to make $171million in net income and about $190million in Free Cash Flow, for a FCFY (Free Cash Flow Yield) of 9.5%. Not bad at all. Still, Soleil is suggesting a "tempered" entry into the shares, as they're at 52week highs, and I understand their caution.

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