Why TransDigm Stock Crashed 13.3% in February
Shares of aerospace component maker TransDigm (NYSE: TDG) slumped 13.3% in February, according to data from S&P Global Market Intelligence. Since the growth stock -- one of the best-performing industrial stocks in 2019 -- was actually up nearly 13% on a year to the day after it reported earnings in early February, it's fair to say that the fall in the share price through February is largely a consequence of fears around the COVID-19 outbreak.
TransDigm needs passenger growth in order to drive demand for aerospace aftermarket parts. Image source: Getty Images.
TransDigm is primarily an aftermarket part manufacturer, and as such, its end market prospects are tied to the amount of revenue passenger kilometers (RPK) airlines generate. The more kilometers airplanes racked up, the more they will need servicing and aftermarket provisioning. Therefore, it's clear that the coronavirus outbreak is going to have a significant impact on the company because of a decline in airline passenger traffic.
Source Fool.com
