For most investors, how much a stock's price changes over time is important. This factor can impact your investment portfolio as well as help you compare investment results across sectors and industries.
Another thing that can drive investing is the fear of missing out, or FOMO. This particularly applies to tech giants and popular consumer-facing stocks.
What if you'd invested in Heico Corporation (HEI) ten years ago? It may not have been easy to hold on to HEI for all that time, but if you did, how much would your investment be worth today?
Heico Corporation's Business In-Depth
With that in mind, let's take a look at Heico Corporation's main business drivers.
Florida-based HEICO Corporation, incorporated in 1957, is one of the world’s leading manufacturers of Federal Aviation Administration (“FAA”)-approved jet engine and aircraft component replacement parts. It also manufactures various types of electronic equipment for the aviation, defense, space, medical, telecommunications and electronics industries. The company’s products are found on large commercial aircraft, regional, business and military aircraft, as well as on a large variety of industrial turbines, targeting systems, missiles and electro-optical devices.HEICO Corp. operates in two segments, the Flight Support group and the Electronic Technologies group.
The Flight Support Group consists of HEICO Aerospace Holdings Corp. and HEICO Flight Support Corp., and their collective subsidiaries. The group uses proprietary technology to design and manufacture jet engine and aircraft component replacement parts. In addition, it repairs, overhauls and distributes jet engine and aircraft components, avionics and instruments. The segment also manufactures thermal insulation products, complex composite assemblies and other component parts, primarily for aerospace, defense, industrial and commercial applications. Net sales for this group were $1.77 billion in fiscal 2023, contributing 59% to the company’s total sales.
The Electronic Technologies Group consists of HEICO Electronic Technologies Corp. and its subsidiaries. It designs, manufactures and sells various types of electronic, microwave and electro-optical products. These products include infrared simulation and test equipment, laser rangefinder receivers, electrical power supplies, back-up power supplies, power conversion products, underwater locator beacons, electromagnetic interference and radio frequency interference shielding, high power capacitor charging power supplies, amplifiers, photo detectors, and radio frequency (RF) and microwave amplifiers. Net sales for this group were $1.23 billion in fiscal 2023, contributing 41% to the company’s total sales.
Total sales consisted of intersegment expenses of $0.27 billion.
Bottom Line
While anyone can invest, building a lucrative investment portfolio takes research, patience, and a little bit of risk. If you had invested in Heico Corporation ten years ago, you're probably feeling pretty good about your investment today.
A $1000 investment made in July 2014 would be worth $9,383.90, or a gain of 838.39%, as of July 30, 2024, according to our calculations. This return excludes dividends but includes price appreciation.
The S&P 500 rose 177.34% and the price of gold increased 76.50% over the same time frame in comparison.
Analysts are forecasting more upside for HEI too.
Heico has been steadily witnessing increased orders for its aftermarket replacement parts and repair and overhaul parts services, buoyed by a steadily recovering commercial air travel. Favorable projections for air travel in 2024 bode well. It also enjoys a solid presence in the defense industry. In contrast to strengthening organic growth, the company's well-defined acquisition strategy has been accelerating its overall performance. Heico holds a strong solvency position and its shares have outperformed the industry in the past six months. However, a supply shortage of aircraft components might affect its performance. Heico is exposed to stringent governmental regulations and failure to comply with them might lead to a material adverse impact on its business. The company’s shares remain expensive compared with its industry.
Over the past four weeks, shares have rallied 7.58%, and there have been 5 higher earnings estimate revisions in the past two months for fiscal 2024 compared to none lower. The consensus estimate has moved up as well.Check Out These Stocks Before They Report Earnings (Free Report)
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
