TransDigm

Because its parts are certified into specific aircraft, customers cannot easily switch suppliers, and those planes need replacement parts for decades. This aftermarket business is roughly 55 percent of sales but about 75 percent of profit. In the most recent quarter sales grew 18 percent to 2.5 billion dollars, with commercial aftermarket the fastest growing channel.

TransDigm runs like a private equity firm inside one company, buying niche parts makers, then raising prices and cutting costs. The result is a profit margin most industrial companies can only dream of, with a core EBITDA margin around 52 to 54 percent. The company just raised its full-year outlook and now expects sales above 10.3 billion dollars.

TransDigm runs with a lot of borrowed money, around 30 billion dollars of net debt after recent acquisitions, and it sometimes borrows even more to pay shareholders giant one-time dividends. As older loans mature, the company is refinancing at higher interest rates, which eats into profit and is the main reason net income was roughly flat even as sales jumped.

This is not a cheap stock. It trades north of 30 times earnings, so the market already expects years of strong growth. If commercial flying slows or the company stumbles on pricing, there is little cushion, and the stock has already pulled back more than 15 percent from its highs.