On Jun 27, Zacks Investment Research upgraded
) to a Zacks Rank #1 (Strong Buy).
ALLIANT TECHSYS (ATK): Free Stock Analysis
ASTRONICS CORP (ATRO): Free Stock Analysis
HEICO CORP (HEI): Free Stock Analysis Report
KRATOS DEFENSE (KTOS): Free Stock Analysis
To read this article on Zacks.com click here.
Why the Upgrade?
This aerospace and defense company delivered positive earnings
surprises in three out of the last four quarters with an average
beat of 1.15%. HEICO has witnessed an upward revision in earnings
estimates on the back of strong first quarter results.
HEICO's second quarter fiscal 2013 earnings per share came in at
44 cents, surpassing the Zacks Consensus Estimate by 10.0%. Net
sales in the reported quarter were $237.7 million, reflecting an
increase of 10% from the prior-year quarter.
The consistent performance and strong second quarter fiscal 2013
results have prompted the company to revise its earnings
expectation upwards. Moreover, the positive outlook on the
commercial airline industry will also boost HEICO's performance.
HEICO now expects net sales and net income for fiscal 2013 to
grow in the bands of 8% - 10% and 11% - 13%, respectively, up
from its previous estimates of 6% - 8% and 9% - 11%.
Financial flexibility has allowed HEICO to make strategic
acquisitions. Since the third quarter of fiscal 2012, HEICO
completed two acquisitions which boosted its results. In Jun 2013
the company completed the planned acquisition of Reinhold
Industries from The Jordan Company, L.P. We expect this
acquisition to be synergistic to its operations.
The cash on hand also allows the company to return more to its
shareholders. On Jun 11, 2013, the company increased its
semi-dividend rate by 17% to 7 cents from 6 cents per share. The
five-year growth rate of HEICO is quite impressive compared to
the industry rate of 7.59%.
The Zacks Consensus Estimate for 2013 increased 4.1% in the last
60 days to $1.73 per share as 6 out of 7 estimates were revised
higher. This is reflected in a year-over-year projected growth
rate of 13.74%. The long-term earnings growth rate of the company
is presently pegged at 18.63%.
Other Stocks to Consider
Besides HEICO Corp, other operators in the industry with a
favorable Zacks Rank are
Kratos Defense & Security Solutions, Inc.
Alliant Techsystems Inc.
). While Astronics and Kratos Defense have the comparable Zacks
#1 Rank as HEICO, Alliant Techsystems carries a Zacks Rank #2