"With hindsight, it is clear that Meggitt had its run in 2005, when the shares jumped a third. There was nothing wrong with the aerospace engineer, but at 15 times earnings is was no longer cheap. Add in the weakening dollar, to which Meggitt is highly exposed, and you have your explanation for why the stock fell 15.9pc.
"One look at the figures and fundamentals, though, and it is clear why Questor remains a fan. Half-year profits rose 12pc, sales 10pc and the order book 7pc, while Meggitt continues to generate cash. As for the aerospace market, describing it as buoyant understates the soaring demand. Airbus, in its biennial review, raised its forecast for commercial aircraft sales by 31pc to 22,700 over the next two decades. Aviation in China and India is growing exponentially.
"Meggitt's black boxes and fire detection devices are vital for all new planes, and high-spec engineering protects its 20pc margins from the downward pressure of mass production. And the more original equipment work that Meggitt wins, the more after-market service sales it will clock up. This is the kind of growth to back.
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