Triumph Group Inc. (TGI) continues to remain focused on growing its core businesses as well as growing through strategic acquisitions. Organic growth remained strong in fiscal 2009 through the addition of products and services, the expansion of the operating capacity and marketing of the complete portfolio of capabilities, while benefiting from the continued strength in the aerospace markets generally.

Triumph has grown strongly over the past decade as a result of overall growth in the aerospace equipment and repair market, augmented by a string of more than 30 acquisitions. Triumph has set its sight on achieving $1 billion in annual sales and has been moving towards its goal through acquisitions. The company has witnessed its sales increase by more than $200 million in the last three years through its seven largest acquisitions. We expect mergers and acquisitions to continue in order to facilitate the company reach its $1 billion annual sales goal.

Triumph has been benefiting from companies such as Boeing, searching for alternatives to internal manufacturing and in-house maintenance. Triumph has been able to take advantage of these trends through increased market share by concentrating on services and production where it has a sustainable cost advantage. This can also be one reason for the company to prosper in the long term.

However, huge dependence on government spending as well as on Boeing, the largest customer, is also discouraging. Intense competition in the aerospace market is likely to have an adverse impact on the company as well.

Nevertheless, the company’s focus on growing its core businesses and strict cost control strategy force us to upgrade the share from Underperform to Neutral.

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