HEICO (HEI) ZACKS·2025-03-18 17:16Core Viewpoint - The article discusses the investment strategy of selecting stocks based on their price-to-earnings (P/E) ratios, emphasizing that both low and rising P/E stocks can yield strong returns [1][2]. Group 1: P/E Ratio Insights - A low P/E ratio suggests that a stock's market price does not reflect its earnings potential, indicating growth opportunities [1]. - Rising P/E ratios can also indicate strong demand for stocks as earnings expectations increase, leading to higher stock prices [3][4]. - Stocks can experience P/E ratio increases of over 100% from their breakout points, presenting significant investment opportunities if identified early [5]. Group 2: Stock Screening Criteria - The article outlines specific criteria for selecting stocks with increasing P/E ratios, including: - Current year EPS growth estimates should be greater than or equal to last year's actual growth [7]. - Price changes over shorter timeframes should exceed those over longer timeframes, indicating consistent price increases [7][8]. - A 20% price increase from the breakout point is a positive signal, while increases over 100% may indicate limited upside potential [8]. Group 3: Selected Stocks - The article identifies five stocks that meet the screening criteria: - Stantec (STN): Provides professional consulting services with an average four-quarter earnings surprise of 6.91% [9][10]. - SL Green Realty (SLG): Dominates the New York office real estate market with an average four-quarter earnings surprise of 11.76% [10]. - Leidos (LDOS): A global leader in science and technology with an average four-quarter earnings surprise of 28.34% [10]. - Heico (HEI): Manufactures FAA-approved aircraft components with an average four-quarter earnings surprise of 11.92% [11]. - Gibraltar Industries (ROCK): Produces products for the industrial and buildings market with an average four-quarter earnings surprise of 1.79% [11][12].