TransDigm

Because its parts are certified into specific aircraft, customers cannot easily switch suppliers, and those planes need replacement parts for decades. Sales just grew 23 percent to 2.74 billion dollars in the quarter, with all three major channels growing double digits and replacement parts for airlines up 17 percent. Defense also grew and built a sizable backlog of future orders.

TransDigm buys niche parts makers, then improves pricing and cuts costs, which is why its profits are enormous for a manufacturer. Core operating profit hit 1.45 billion dollars last quarter, a 52.8 percent margin. Management just raised its full year outlook again and now expects sales of roughly 10.5 billion dollars, up 19 percent from last year.

TransDigm runs on a lot of borrowed money and keeps adding to it. It raised another 1.5 billion dollars of debt in April, spent 2.2 billion on two acquisitions, and just agreed to buy another company for 1.07 billion. Higher interest costs are why profit rose only 10 percent while sales jumped 23 percent.

This is not a cheap stock, and the company itself paid an average of about 1,208 dollars per share buying back 1.8 billion dollars of its own stock this year. The market already expects years of strong growth, so if air travel slows or an acquisition disappoints, there is very little cushion in the price.