HEICO CORP (HEI-N)

They benefit from peer Boeing whose accident rate continues to rise. They make OEM parts for commercial planes, and their electronics division has contracts with US Defence.

Aerospace sector has done very well. Demand for components will still be great.

HEI has seen a bit of a pullback recently but is still up 32% over the last year. Growth seemed to slow a bit in the last quarter and trading at 55X earnings doesn't leave a whole lot of room for error. Regardless, we don't think a whole lot has changed with a single earnings report here and we don't think a thesis needs to change at this stage. We would be comfortable as a HOLD and would be more of a BUY if it approached $220.
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Has owned shares in the past. Very good business. Consistently profitable. High barriers to entry. Share price not cheap. Would wait for share price to fall before buying. 

HEI is a high-quality name in the aerospace industry; the company possesses a track record of compounding EPS by double-digits through acquisitions lasting for decades. In Q3-2024, HEI reported revenue growth of 37% to $992M, slightly below the expectation of $994M, and EBITDA also grew 40% to $2.84B. HEI also reported EPS of $0.97, beating the estimate of $0.92. HEI’s Flight Support segment experienced very strong demand with around 15% organic growth. HEI also runs a moderately leveraged balance sheet with net debt/EBITDA of 2.11x. Overall the result looks okay, in line with expectations, but its valuation is still not cheap enough to add at the current levels. Still, we would be comfortable holding HEI here for the long term.
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Apart from the most recent earnings, the street loves this name. Selling plane parts, it benefits from the shortage of new plays and increased plane repairs. They have mini-monopolies on these parts and is pushing prices aggressively, a good business model. The valuation has run up, though. He isn't looking at this now. Prefers Raytheon for its performance. You're fine to keep holding it though.

Very high quality business.
Never cheap enough to justify investment.
Company very skilled at M&A.
Strong demand for aircraft parts.
Would invest if share price ever falls.
Sees demand for air travel growing.

They've done very well on the back of Boeing's woes. They make replacement parts for old planes, but it's not a cheap stock. He's taken a half position so he can be nimble. A good, long-term company despite a little volatility. They're acquisitive and smart with debt. Airlines are a little risky now, so he feels better being in the parts side, like Heico.