Diamonds and Dogs

5/10/16

The sky is the limit for today's diamond. TransDigm Group (TDG) is soaring over 10% thanks to better than expected earnings. The company designs and produces aircraft components for the two largest plane manufacturers, Boeing and Airbus. Earnings per share jumped 35.5% to $2.86, breezing past expectations for $2.58. Revenue climbed 28.7% to $796.8 million, topping views for $777.1 million. The company raised its full-year EPS guidance to $11.04-$11.28, well above forecasts for $10.82. That compares with an outlook for $10.65 to $10.89 offered by the company during the prior quarter's results. TransDigm said share buybacks during the second quarter helped boost the company's EPS forecast.  With bookings up significantly for future quarters, the stock price may have more upside going forward.

There's a gap that just keeps getting wider with today's dog. Gap Inc. (GPS) is seeing their shares drop by 12% today to a new low since 2012. The company reported weaker than expected earnings and lower than expected forecast for the year. To throw more fuel on the fire Duetsche Bank reduced its target to $17 from $21 and reiterated a sell rating. Not a good time for retailers or their shareholders. Gap's stock has been on a steady decline over the last year now down 50% from last summer's highs.