Should You Consider Investing in HEICO Corp. (HEI)?

Giverny Capital, an asset management firm, published its fourth-quarter 2021 investor letter – a copy of which can be downloaded here. A quarterly net return of 10.73% was delivered by the fund for the fourth quarter of 2021, slightly below its benchmark, the S&P 500 Index, which delivered an 11.03% gain for the same period. Spare some time to check the fund’s top 5 holdings to have a clue about their top bets for 2022.

Giverny Capital Asset Management, in its Q4 2021 investor letter, mentioned HEICO Corporation (NYSE: HEI) and discussed its stance on the firm. HEICO Corporation is a Hollywood, Florida-based aerospace company with a $16.2 billion market capitalization. HEI delivered a -6.21% return since the beginning of the year, while its 12-month returns are up by 14.88%. The stock closed at $135.26 per share on January 28, 2022.

Here is what Giverny Capital Asset Management has to say about HEICO Corporation in its Q4 2021 investor letter:

“Our ninth-largest holding at year-end was Heico. This is another company run by sharp owner-operators, in this case the Mendelson family in South Florida. Heico is the country’s leading supplier of private-label spare parts for commercial aviation. The federal government regulates airplane spare parts very tightly, and there are few private-label manufacturers. Heico has steadily acquired niche suppliers and won regulatory approvals for new parts over decades. It has by far the widest offering of unbranded parts and can sell those parts for 30% less than the original equipment manufacturers and still make healthy returns. This market, understandably, has been under pressure as airplanes sat on the ground during the pandemic. But as miles flown rebounded in recent months, Heico enjoyed robust demand. Throughout the downturn, it also grew its aviation electronics business steadily. The stock is expensive relative to earnings, but Heico’s share of the aviation spare parts market is small, leaving years of growth ahead.”

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Our calculations show that HEICO Corporation (NYSE: HEI) failed to obtain a mark on our list of the 30 Most Popular Stocks Among Hedge Funds. HEI was in 35 hedge fund portfolios at the end of the third quarter of 2021, compared to 41 funds in the previous quarter. HEICO Corporation (NYSE: HEI) delivered a -2.96% return in the past 3 months.

You can find other letters from hedge funds and prominent investors on our hedge fund investor letters 2021 Q4 page.

Disclosure: None. This article is originally published at Insider Monkey.