Parker-Hannifin Corporation (PHC) is a manufacturer of motion and control technologies that provide engineered solutions for mobile, industrial and aerospace markets. The company's breath of expertise in both motion, and control, technologies backed by its global industrial distribution network assists it in delivering profitable growth. The company's value stream is composed of seven product groups including aerospace, automation, engineered materials, filtration, fluid connectors, hydraulics and instrumentation. PHC recorded revenues of ~12 billion and an operating profit of ~1.5 billion USD in 2015. Strengths: PHC sells the bulk of its products to original equipment manufacturers (OEMs) and their replacement markets. The demand for its …show more content…
CPI adjusted airfare. Cost of travel has declined over time (Deloitte 2017) Figure 2. Commercial aircraft growth. (Deloitte 2017) Increasing demand for new aircraft due to the rise in demand for affordable air travel will aids in expanding PHC’s revenues and profits. The rapid growth of air travel in the world's emerging economies are stabilizing orders for airplanes. According to Deloitte, the global air traffic is projected to grow at 4.8% annually (Fig 3). Figure 3. Global air traffic 1981-2016. Pax Load is equivalent to the % of utilized aircraft. RPK is equivalent to revenue by passenger by kilometer (Deloitte 2017) As a result, by 2035, the fleet of passenger aircraft (with 100 seats or more) orders will almost double its current figures (Fig 4). Figure 4. Large passenger aircraft orders based on Boeing's projections (Deloitte 2017) PHC’s aerospace systems segment is the best reason to invest in the company. Sales of this value stream’s products are made primarily in the commercial and military aerospace markets to both OEMs and MRO. As worldwide demand for aircraft continues to grow, making an investment in PHC to grow your fund is paramount. Increasing demand for commercial airplanes represents an opportunity for PHC to capitalize on this market and, in turn, for Opportunity Group to capitalize and grow its