It's a sure bet that most investors, even those who regularly devour financial media, were until recently not familiar with Heico (HEI 0.60%). The specialty industrial components maker is a decades-old enterprise that operates an unglamorous business and rarely generates attention-grabbing news.Yet it's been quite the outperformer at times, and if anyone likes a solid yet under-the-radar stock, it's Warren Buffett. Heico's relative obscurity ended forever when the master investors at Berkshire Hathaway firs ...

Group 1 - Heico is a key supplier in various industries, generating approximately $3.8 billion in annual sales, with a business split of roughly 2-to-1 between flight support and electronic technologies [5][6] - The company has significantly outperformed the S&P 500 index over its lifetime, primarily due to its strategy of serial acquisitions, having acquired nearly three dozen companies since 1999 [6][8] - Heico's strong management and efficient growth have led to a higher return on equity (ROE) over time, indicating a well-run company that effectively utilizes its financial resources [8][9] Group 2 - Berkshire Hathaway, led by Warren Buffett, has increased its stake in Heico, although this stake represents only about 0.1% of its portfolio, suggesting a cautious approach to investment in this stock [10][12] - Heico's stock currently trades at a forward P/E ratio of 65, with analysts estimating nearly 20% annual earnings growth over the next three to five years, resulting in a PEG ratio of 3.3, which is considered steep [11] - The recent purchase by Berkshire indicates that while Heico may have potential, it is currently viewed as expensive, and investors are advised to keep cash available for potential market declines that could present better buying opportunities [10][12]

Heico Corporation (HEI) has been on a downward spiral lately with significant selling pressure. After declining 5.9% over the past four weeks, the stock looks well positioned for a trend reversal as it is now in oversold territory and there is strong agreement among Wall Street analysts that the company will report better earnings than they predicted earlier.How to Determine if a Stock is OversoldWe use Relative Strength Index (RSI), one of the most commonly used technical indicators, for spotting whether a ...

Investors seek growth stocks to capitalize on above-average growth in financials that help these securities grab the market's attention and produce exceptional returns. But finding a great growth stock is not easy at all. By their very nature, these stocks carry above-average risk and volatility. Moreover, if a company's growth story is over or nearing its end, betting on it could lead to significant loss. However, the task of finding cutting-edge growth stocks is made easy with the help of the Zacks Growth ...

Investors seek growth stocks to capitalize on above-average growth in financials that help these securities grab the market's attention and produce exceptional returns. But finding a growth stock that can live up to its true potential can be a tough task. By their very nature, these stocks carry above-average risk and volatility. Moreover, if a company's growth story is over or nearing its end, betting on it could lead to significant loss. However, it's pretty easy to find cutting-edge growth stocks with th ...

Investors interested in Aerospace stocks should always be looking to find the best-performing companies in the group. Is Heico Corporation (HEI) one of those stocks right now? By taking a look at the stock's year-to-date performance in comparison to its Aerospace peers, we might be able to answer that question. Heico Corporation is a member of our Aerospace group, which includes 46 different companies and currently sits at #1 in the Zacks Sector Rank. The Zacks Sector Rank considers 16 different sector grou ...

It has been about a month since the last earnings report for Heico Corporation (HEI) . Shares have added about 7.4% in that time frame, outperforming the S&P 500. Will the recent positive trend continue leading up to its next earnings release, or is Heico due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers. HEICO's Q3 Earnings Surpass Estimates, Sales In ...

Group 1: Buffett's Investment Strategy - Warren Buffett, known for his value investing style, made new positions in two stocks in Q2 2024: Heico and Ulta Beauty [2][3] - Heico shares were purchased at 1.04 million shares, while Ulta Beauty saw over 690,000 shares acquired [2] Group 2: Valuation Metrics - Ulta Beauty trades at a Price/Earnings (P/E) trailing 12 months (TTM) of 15.93X, compared to the industry average of 10.30X [3] - Heico's P/E (TTM) stands at 74.59X, significantly higher than the industry average of 33.23X [3] - Chubb trades at a P/E (TTM) of 12.10X versus the industry average of 15.58X, while Occidental Petroleum trades at 14.46X against an industry average of 13.73X [6] Group 3: Additional Investments - Buffett increased his position in Chubb by 4.3%, making it Berkshire's ninth-largest holding [4] - He also acquired 2.43 million shares of Liberty SiriusXM Group Class A and 4.52 million shares of Class C, along with 96.2 million shares of Sirius XM, raising Berkshire's stake by over 262% [5] Group 4: ETF Recommendations - For investors concerned about overvaluation, ETFs like TCW Compounders ETF GRW and SPDR S&P Aerospace & Defense ETF (XAR) are suggested for Heico [4] - Ulta has a 4.66% weight in Neuberger Berman Next Generation Connected Consumer ETF (NBCC) [4] - Occidental-heavy ETFs include Texas Capital Texas Oil Index ETF (OILT) and First Trust Nasdaq Oil & Gas ETF (FTXN) [7]

Financial Performance - Consolidated net sales for the first nine months of fiscal 2024 increased by 40% to a record $2,844.0 million, up from $2,031.7 million in the same period of fiscal 2023[87]. - The Flight Support Group (FSG) net sales rose by 67% to $1,947.6 million, driven by $625.5 million from acquisitions and 13% organic growth[87]. - The Electronic Technologies Group (ETG) net sales increased by 5% to $927.4 million, with $39.4 million contributed by acquisitions, despite a 1% organic decline[87]. - Consolidated net sales increased by 37% to a record $992.2 million in Q3 fiscal 2024, up from $722.9 million in Q3 fiscal 2023, driven by a 68% increase in FSG net sales[99]. - Net income attributable to HEICO increased by 25% to a record $374.4 million, or $2.67 per diluted share, in the first nine months of fiscal 2024[97]. - Net income attributable to HEICO increased by 34% to a record $136.6 million, or $0.97 per diluted share, in Q3 fiscal 2024, up from $102.0 million, or $0.74 per diluted share, in Q3 fiscal 2023[109]. Profitability and Margins - Consolidated gross profit margin improved to 39.0% in the first nine months of fiscal 2024, up from 38.8% in the same period of fiscal 2023[88]. - Gross profit margin improved to 39.2% in Q3 fiscal 2024, up from 38.6% in Q3 fiscal 2023, reflecting increases in both ETG and FSG margins[100]. - Consolidated operating income increased by 39% to a record $605.8 million, with the FSG's operating income rising by 61% to $438.6 million[91]. - Operating income increased by 45% to a record $216.4 million in Q3 fiscal 2024, up from $149.4 million in Q3 fiscal 2023, with FSG operating income rising by 72%[103]. Expenses and Liabilities - Interest expense rose significantly to $113.9 million in the first nine months of fiscal 2024, compared to $29.6 million in the same period of fiscal 2023, primarily due to increased debt from acquisitions[94]. - Consolidated SG&A expenses rose to $172.8 million in Q3 fiscal 2024, compared to $129.4 million in Q3 fiscal 2023, but as a percentage of net sales, it decreased to 17.4% from 17.9%[101][102]. - Interest expense increased to $36.8 million in Q3 fiscal 2024, compared to $12.1 million in Q3 fiscal 2023, primarily due to higher outstanding debt from acquisitions[105]. - Current liabilities decreased to $500,516 from $531,466, reflecting a reduction of about 5.8%[127]. - Noncurrent liabilities decreased to $2,808,168 from $2,895,592, showing a decline of approximately 3.0%[127]. Research and Development - Total new product research and development expenses were $82.8 million in the first nine months of fiscal 2024, up from $68.5 million in the same period of fiscal 2023[88]. - The company continues to focus on introducing new products and services, which is critical for maintaining competitive pricing and sales growth[133]. Tax and Income - The effective tax rate decreased to 17.3% in the first nine months of fiscal 2024, down from 19.0% in the same period of fiscal 2023[95]. - The effective tax rate decreased to 18.0% in Q3 fiscal 2024, down from 18.4% in Q3 fiscal 2023, reflecting prior year impacts of non-deductible acquisition expenses[107]. - Net income from consolidated operations for the nine months ended July 31, 2024, was $387,785, compared to $363,655 attributable to HEICO, indicating a growth in profitability[129]. Cash Flow and Assets - Net cash provided by operating activities increased by 55% to $466.7 million in the first nine months of fiscal 2024, up from $300.4 million in the same period of fiscal 2023[115]. - As of July 31, 2024, current assets increased to $1,607,679, up from $1,440,062 as of October 31, 2023, representing an increase of approximately 11.7%[127]. - The amount due from non-guarantor subsidiaries increased to $207,541 from $182,795, indicating a rise of approximately 13.5%[127]. - Redeemable noncontrolling interests decreased to $238,357 from $252,013, a decline of about 5.4%[127]. Future Outlook and Risks - The company remains optimistic about achieving net sales growth in both FSG and ETG, driven by acquisitions and sustained product demand[110]. - The company anticipates potential risks related to public health threats and market demand fluctuations, which could impact future performance[131]. - The management confirmed that there have been no changes in internal control over financial reporting that materially affected the company during the third quarter[138].

HEICO Corporation (NYSE:HEI) Q3 2024 Earnings Conference Call August 27, 2024 9:00 AM ET Company Participants Laurans Mendelson - Chairman & CEO Eric Mendelson - Co-President & President of Flight Support Group Victor Mendelson - Co-President & President of Electronic Technologies Group Carlos Macau - EVP & CFO Conference Call Participants Robert Spingarn - Melius Research Bert Subin - Stifel Larry Solow - CJS Securities Peter Arment - Baird David Strauss - Barclays Pete Skibitski - Alembic Global Louis Raf ...