Ducommun (DCO), mcap=$514m, price $42.72 vs $41.96

– Aerospace and defense supplier at 10x cash earnings.
– In middle-innings of a multi-year turnaround, the benefits of which were obscured by COVID.
– Profit margins improving driven by excellent operational execution.
– Clear sight of high single-digit growth for the next 5 years.
– New program wins from Airbus and 737 MAX recovery provide upside to growth.
– Compounding EBIT at 12.5% CAGR.
– Expected takeout candidate by SPR or private equity.

Valuation: Trades at 10% fwd FCF yield or 10x cash earnings.

Exp. gain: +380% to $200/share in 4.5 years (IRR of 41%).

Full DCO write-up (free guest account required): https://www.valueinvestorsclub.com/idea/DUCOMMUN_INC/5821578600

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