Why did Berkshire Hathaway acquire Precision Castparts and was it successful?

The acquisition (2016): Warren Buffett announced Berkshire Hathaway would acquire Precision Castparts for $37.2 billion — the largest acquisition in Berkshire's history. Rationale: PCC was the world's leading manufacturer of complex aerospace structural castings and forgings; the company had a decades-long position on virtually every major commercial and military aircraft; aerospace production rates were expected to grow for decades driven by air travel demand; PCC's business was highly capital intensive but earned exceptional returns on invested capital from its sole-source qualification positions; Buffett called PCC 'the most complex supply chain business we've ever tried to understand.' Outcomes: the acquisition closed in early 2016; almost immediately, Boeing announced the 737 MAX grounding (2019) followed by COVID-19 collapsing air travel demand (2020); commercial aerospace production was cut dramatically; PCC's revenue and earnings declined substantially below acquisition-period projections; Berkshire took an approximately $11B goodwill impairment write-down on PCC in 2020 — acknowledging the acquisition price was too high given the aircraft production collapse. Long-term outlook: as commercial aviation has recovered and production rates are ramping, PCC's earnings have improved; the fundamental business thesis (sole-source aerospace qualification positions with multi-decade longevity) remains intact; the question is whether final returns will justify the $37.2B acquisition price.

What are nickel superalloys and why are they used in jet engines?

Nickel superalloys: a family of metal alloys based primarily on nickel (Ni) with additions of cobalt (Co), chromium (Cr), aluminum (Al), titanium (Ti), rhenium (Re), and other elements; the specific alloy recipe is optimized for extreme high-temperature performance. Why nickel: nickel has a face-centered cubic (FCC) crystal structure that remains stable from room temperature to near its melting point; FCC metals maintain ductility at elevated temperatures (unlike body-centered cubic metals that become brittle); nickel's electronic structure allows alloying additions that precipitate strengthening phases (particularly gamma-prime Ni3Al and Ni3Ti precipitates embedded in the nickel matrix). Key properties required for turbine blades: creep resistance — maintaining dimensional stability under sustained stress at 1,100-1,300°C; oxidation resistance — resistance to oxidation and hot corrosion from combustion gases; fatigue resistance — surviving millions of thermal cycles and mechanical stress cycles; thermal fatigue resistance — surviving rapid temperature changes during engine start/stop cycles. Single-crystal superalloys: conventional polycrystalline turbine blades contain grain boundaries (interfaces between crystals) that are weak points for creep failure; Howmet and PCC pioneered directional solidification and single-crystal casting techniques that eliminate grain boundaries entirely; single-crystal blades (CMSX-4, Rene N6) are the strongest available and enable the highest combustion temperatures (improving engine efficiency) in the CFM LEAP, GE9X, and Pratt & Whitney GTF engines.

How does the aerospace supply chain qualify new suppliers and why does this create barriers?

The qualification process: every component on a certified commercial aircraft must be qualified to meet FAA (or EASA for European aircraft) airworthiness standards; qualification involves multiple steps lasting typically 3-7 years. Design validation: the component design must meet engineering specifications through analysis and testing. Material qualification: the specific metal alloy (e.g., CMSX-4 single crystal from Howmet's specific process) must be tested and documented as meeting required properties at all operating temperatures. Process qualification: the manufacturing process (casting, machining, heat treatment, coating) must be documented and validated as producing consistent results; any process change (different casting machine, different heat treatment furnace) may require requalification. Part qualification: sample parts must be tested destructively (fatigue testing to failure, creep testing) to demonstrate compliance. Flight testing: some components require flight test validation before production approval. Production qualification: after all above steps, NADCAP (National Aerospace and Defense Contractors Accreditation Program) audit of the supplier's manufacturing processes. Why this creates barriers: the 3-7 year qualification timeline means that even if an airline or OEM wanted to switch turbine blade suppliers, a new supplier couldn't begin shipping qualified parts for years; during that time, the existing supplier (Howmet or PCC) remains the sole source; this qualification-based lock-in creates structural pricing power and protects market position through normal competitive dynamics.

brimindinvest.com / compare / hwm-vs-pccLIVE

HWM

Howmet Aerospace Inc. · Industrials - Aerospace Structural Components

$277.66

+9.70% this month

VERSUS

⟷

COMPARE

TGI

TransDigm Group Incorporated (Aerospace Component Comparison) · Industrials - Aerospace Components / Proprietary Defense Hardware

N/A

N/A this month

Scoreboard verdict

Across AI score, momentum, valuation, upside, operating margin

HWM

0

TGI

0

MIXED SETUP

Comparison scoreboard

MIXED SETUP

AI Score

HWM 55.9

TGI N/A

1Y Return

HWM +61.32%

TGI N/A

Fwd P/E

HWM 43.99

TGI N/A

Target Up.

HWM +14.57%

TGI N/A

Op. Margin

HWM 28.19%

TGI N/A

Metrics last refreshed: 6/20/2026

Quick take

HWM vs Aerospace Structural Components Comparison: AI Score, Valuation, Performance and Upside

HWM (Howmet Aerospace) is the publicly traded leader in investment-cast jet engine airfoils, aerospace fasteners, and structural components — a direct competitor to private Precision Castparts (Berkshire Hathaway subsidiary) in the most technically demanding aerospace manufacturing segments. Both companies have multi-decade qualification positions on all major commercial jet engine programs that create structural recurring revenue as production rates ramp.

Howmet Aerospace is a world-class precision aerospace component manufacturer with sole-source positions in technically demanding investment-cast turbine blades, airframe fasteners, and structural components (benefiting from Boeing/Airbus production ramp tailwinds, aftermarket blade replacement demand, and irreplaceable metallurgical expertise) — competing against private Precision Castparts in a duopoly-like market for complex aerospace castings and forgings where qualifications take years and switching is extraordinarily difficult.

Live analysis · updated 6/20/2026

HWM and TGI are closely matched — they split the tracked metrics evenly.

Normalized 1Y performance

HWM

TGI

Not enough data to chart yet.

Recent returns

HWM

TGI

Analyst price targets & sentiment

HWM

Price target range

analyst mean$303.23
current price$277.66

+14.6% upside to analyst mean

TGI

Price target data unavailable

N/A

Who should consider this stock?

HWM may suit investors who:

→Value Howmet's technically irreplaceable position in investment-cast turbine blades — a capability requiring decades of accumulated metallurgical expertise that creates genuine barriers to competition
→See commercial aerospace production rate ramps (737 MAX to 50+/month, A320neo to 75+/month) as creating multi-year volume growth for Howmet's commercial OEM segment
→Appreciate Howmet's aftermarket revenue as providing recurring, high-margin cash flow throughout 20-30 year aircraft service lives that compounds the value of each engine program qualification

TDG may suit investors who:

→Seek sole-source aerospace component pricing power across hundreds of proprietary niches where TransDigm has no competition — the business model creates extraordinary pricing power in a fragmented supply landscape
→Are comfortable with TransDigm's high leverage as a deliberate capital structure choice that the management team has executed successfully over multiple economic cycles
→Value TransDigm's aftermarket-heavy mix as providing the highest-margin, most recurring revenue profile in the commercial aerospace supply chain

Performance & AI score

Metric	HWM	TGI
AI score	55.9	N/A
AI rank	#244	N/A
Latest close	$277.66	N/A
1M return	+9.70%	N/A
6M return	+45.23%	N/A
1Y return	+61.32%	N/A

$10,000 invested — hypothetical growth (dividends reinvested)

How much would $10,000 be worth today if invested at the start of each period, with all dividends reinvested?

Period	HWM	TGI
1Y ago	$16.31K (+63.1%) started 2025-06-18	N/A
5Y ago	$83.54K (+735.4%) started 2021-06-21	N/A
10Y ago	$155.31K (+1453.1%) started 2016-11-01	N/A

Hypothetical — past performance does not guarantee future results.

Valuation & upside potential

Metric	HWM	TGI
Market cap	$105.9B	N/A
Trailing P/E	61.41	N/A
Forward P/E	43.99	N/A
Price/Sales	N/A	1.60
EV/Revenue	12.56	N/A
Analyst target	$303.23	N/A
Target upside	+14.57%	N/A

Growth, profitability & risk

Metric	HWM	TGI
Revenue growth	19.10%	N/A
Earnings growth	71.40%	N/A
EPS growth	+71.40%	N/A
FCF margin	+13.83%	N/A
Operating margin	28.19%	N/A
Profit margin	20.23%	N/A
ROIC proxy	33.82%	N/A
Return on equity	33.82%	N/A
Dividend yield	0.18%	N/A
Beta	1.19	0.28
Debt/equity	87.79	N/A
Current ratio	2.44	N/A
Quick ratio	1.46	N/A

Drawdown & downside risk

Lower drawdown and smaller single-period drops generally indicate a smoother ride, though they do not guarantee lower future risk.

1Y risk snapshot

HWM max drawdown15.89%

TGI max drawdownN/A

HWM max wkly drop6.65%

TGI max wkly dropN/A

5Y risk snapshot

HWM max drawdown21.22%

TGI max drawdownN/A

HWM max wkly drop13.97%

TGI max wkly dropN/A

10Y risk snapshot

HWM max drawdown68.92%

TGI max drawdownN/A

HWM max wkly drop35.43%

TGI max wkly dropN/A

Performance metrics by period

Period	Metric	HWM	TGI
1Y	Growth	+63.11%	N/A
	CAGR	+63.22%	N/A
	Sharpe ratio	1.57	N/A
	Max drawdown	15.89%	N/A
	Max daily drop	6.44%	N/A
	Max wkly drop	6.65%	N/A
5Y	Growth	+725.09%	N/A
	CAGR	+52.61%	N/A
	Sharpe ratio	1.34	N/A
	Max drawdown	21.22%	N/A
	Max daily drop	10.14%	N/A
	Max wkly drop	13.97%	N/A
10Y	Growth	+1409.47%	N/A
	CAGR	+32.57%	N/A
	Sharpe ratio	0.79	N/A
	Max drawdown	68.92%	N/A
	Max daily drop	20.63%	N/A
	Max wkly drop	35.43%	N/A

Business comparison

Category	HWM	TGI
Company	Howmet Aerospace Inc.	TransDigm Group Incorporated (Aerospace Component Comparison)
Sector	Industrials	Industrials - Aerospace Components / Proprietary Defense Hardware
Industry	N/A	N/A
Core business	Howmet Aerospace is a world-leading manufacturer of advanced aerospace components, primarily using investment casting and forging to produce jet engine airfoils (turbine blades, vanes, and nozzle guide vanes that must survive 2,000°F+ temperatures in jet engine hot sections), fastening systems (titanium and specialty alloy fasteners for airframes), and engineered structures (complex titanium and aluminum structural components for commercial and military aircraft). Howmet serves Boeing, Airbus, GE Aerospace, Pratt & Whitney, Rolls-Royce, and defense contractors. Howmet was spun out of Arconic (formerly Alcoa's aerospace unit) in 2020 as a pure-play aerospace component manufacturer. Howmet's components require years of qualification testing before being certified for use on specific engine models — once qualified, Howmet products are essentially sole-sourced on those programs.	TransDigm Group (TDG) is used here as a publicly traded aerospace component reference comparable to Precision Castparts (which is private). TransDigm acquires proprietary aerospace components businesses with sole-source positions on commercial and military aircraft — hydraulic systems, ignition systems, specialized fasteners, sensors, and numerous defense-specific components. TransDigm's business model: buy aerospace component businesses with pricing power (sole-sourced on specific aircraft); extract value through pricing discipline and operational efficiency; use cash flow for further acquisitions. Note: Precision Castparts (PCC) remains a wholly owned Berkshire Hathaway subsidiary since 2016; PCC is among the world's two largest investment casting and forging companies for aerospace (alongside Howmet); PCC makes structural titanium castings, nickel superalloy castings, and complex forgings for all major commercial and military aircraft programs.
Investor focus	Investors track Howmet's revenue growth from commercial aerospace (driven by Boeing 737 MAX and Airbus A320neo production ramps), engine program content, fasteners sales, defense exposure, and EBITDA margin expansion.	TransDigm investors track revenue by commercial aftermarket vs. OEM vs. defense (aftermarket is highest margin), pricing power sustainability, acquisition pipeline, and leverage (TransDigm is highly leveraged). PCC (private) was evaluated on aerospace cast and forged component volume and aerospace production rates.

HWM strengths

→Howmet's investment casting technology for jet engine airfoils is among the most technically demanding manufacturing in the world — turbine blades operating at 2,000°F+ in GE CFM56 and LEAP engines must maintain structural integrity, dimensional precision, and aerodynamic shape; Howmet's directional solidification and single-crystal casting processes for these airfoils represent decades of accumulated metallurgical know-how that competitors cannot easily replicate
→Long-tail aerospace content value — a Howmet turbine blade qualified for a specific engine variant flies on every aircraft using that engine for 20-30 years; commercial aircraft engines are maintained and repaired for decades; aftermarket replacement blade demand provides recurring, high-margin revenue beyond initial production
→Commercial aerospace production ramp (737 MAX, A320neo) creates multi-year volume growth tailwind — Boeing and Airbus have massive backlogs (several years of aircraft orders); as production rates ramp, Howmet supplies proportionally more engine and airframe components; structural volume growth without requiring Howmet to win new programs

TGI strengths

→TransDigm's sole-source component positions create near-monopoly pricing power in hundreds of narrow aerospace niches — a proprietary hydraulic valve qualified for a specific aircraft model has no alternative supplier; TransDigm charges prices reflecting this scarcity
→Aftermarket revenue at high margins provides recurring cash flow throughout aircraft service life — when airlines need replacement components for aging planes, they must buy from sole-source suppliers like TransDigm regardless of price; aftermarket margins are significantly above OEM supply margins
→Precision Castparts' investment casting leadership (as context): PCC operated massive investment casting and forging facilities producing titanium and nickel superalloy structural components for all major commercial aircraft; PCC's scale and qualification breadth across Boeing 787, Airbus A350, and military programs made it Howmet's primary competitor

Risks to watch — HWM

→Boeing production disruptions (737 MAX groundings, quality escapes) directly impact Howmet's volume — Howmet is among Boeing's largest structural component suppliers; Boeing production cuts reduce Howmet's shipment volumes
→Single-crystal turbine blade casting is technically demanding — any defect in the complex casting process produces scrap; yield rates and ramp efficiency are critical to gross margin delivery
→Titanium supply chain exposure to Russia — aerospace-grade titanium was historically supplied significantly from Russia (VSMPO-AVISMA); supply disruptions following Ukraine invasion required Western aerospace to qualify alternative titanium sources

Risks to watch — TGI

→TransDigm's pricing practices have attracted Congressional scrutiny — the company has faced criticism for pricing increases on sole-source defense components; regulatory pricing pressure could constrain future pricing power
→High leverage limits financial flexibility — TransDigm uses debt extensively for acquisitions; leverage ratios are among the highest in aerospace; rising interest rates increase debt service costs
→For PCC (private context): Berkshire's 2016 acquisition at $37.2B was considered a premium price; subsequent aerospace cycle weakness (COVID impact on commercial aviation, Boeing 737 MAX grounding) impaired PCC's near-term earnings below the acquisition-implied expectations

Frequently asked questions

Investment casting (lost-wax casting): a manufacturing process for creating complex metal components with precision dimensions and smooth surfaces; a wax or plastic pattern of the desired component shape is created; the pattern is coated in ceramic slurry, which hardens around it forming a mold; the wax is melted out (hence 'lost wax'), leaving a ceramic mold cavity; molten metal (nickel superalloy, titanium, aluminum) is poured into the cavity and solidifies; the ceramic mold is removed, leaving a near-net-shape metal component. Why it's technically demanding for aerospace turbine blades: jet engine turbine blades operate at temperatures (1,200-1,500°C) that exceed the melting point of the alloy itself; this seems impossible, but is achieved through three innovations — nickel superalloys with exceptional high-temperature strength (CMSX-4 and Rene N6 single crystal alloys maintain strength above their nominal melting points due to crystalline structure); thermal barrier coatings (ceramic coatings on blade surfaces that insulate the metal from gas path temperatures); and internal cooling channels (hollow blade cores allow compressed air to flow through, keeping the metal below its melting point). Casting hollow, internally cooled blades with precise core geometry — and doing so at production scale with acceptable yield rates — requires extraordinary ceramic core tooling, metallurgical expertise, and quality control. Howmet and PCC are the two primary Western suppliers with the expertise to produce single-crystal blades at commercial scale.

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