We recently compiled a list of the 20 Most Profitable Stocks of the Last 20 Years. In this article, we are going to take a look at where HEICO Corporation (NYSE:HEI) stands against the other profitable stocks.
The stock market has a long history of generating wealth for investors. While past performance doesn’t guarantee future results, studying successful companies can provide valuable insights. By understanding the factors that drive these companies’ growth, we can potentially make better investment decisions in the future. It’s important to remember that investing involves risk, and conducting thorough research is crucial before making any investment decisions.
Investors frequently overlook revenue in favor of profitability when evaluating stocks. Profit is what’s left over after all costs are paid. Revenue is the total amount of goods and services sold. Because it is essential to determine if a business is a growth stock or a value one, profitability is important. To learn more about growth stocks, see 12 Best Growth Stocks to Buy and Hold in 2024. You can also discover some undervalued value stocks by reading 11 Oversold Value Stocks To Buy Now.
The U.S. stock market has seen several major events since 2000, including the dot-com boom and fall, the 2008 financial crisis, a tech boom with trillion-dollar values, and the 2020 pandemic crisis. The S&P’s broader market index produced double-digit yearly returns thirteen times between 2003 and 2023. This strong performance can be largely attributed to the phenomenal returns generated by technology stocks, which significantly boosted the overall return of the large-cap market.
According to a recent estimate, the aggregate market value of the top seven S&P 500 corporations is almost double that of the Japanese market. The head of topical research and global economics, Jim Reid, cautions that this is the most concentrated the US market has ever been.
As interest in growth stocks increases due to the hype surrounding AI and the prospect of rate cuts, these companies’ fortunes are expected to soar. To satisfy market demand, businesses are making significant investments in AI. AI’s impact on altering work patterns was highlighted by Satya Nadella du. According to them,:
“A growing body of evidence makes clear the role AI will play in transforming work. Our own research, as well as external studies, show as much as 70% improvement in productivity, using generative AI for specific work tasks.”
Our Methodology
To identify the most profitable stocks, we looked at the 20-year annualized returns of publicly traded companies in the US market from 2004 to 2024 and selected and ranked those with the highest 20-year annualized returns.
A fighter jet in formation, revealing the prowess of the companies defense arm.
HEICO Corporation (NYSE:HEI)
20-Year Annualized Return: 22.46%
HEICO Corporation (NYSE:HEI) has emerged as one of the most profitable stocks over the past two decades. The company is a leading aerospace and electronics manufacturer, specializing in niche products for the aviation, defense, space, and telecommunications industries.
HEICO Corporation reported strong financial performance for Q1 2024, with net sales increasing by 44% to $896.4 million compared to $620.9 million in Q1 2023. The company’s commercial aerospace sales expansion was a significant driver which was supported by fourteen consecutive quarters of sequential growth in net sales within the Flight Support Group, driven by heightened demand for aerospace products and services. Contributions from acquisitions made in fiscal 2023 also bolstered revenue growth. Net income increased by 23% to $114.7 million, or $0.82 per diluted share, in Q1 2024, up from $93.0 million, or $0.67 per diluted share, in Q1 2023. Looking forward, HEICO remains focused on sustaining growth through continued aerospace sector strength, acquisitions, and operational efficiencies.
In Q1 2024, there were around 52 hedge fund holders in the company, up from 46 in the previous quarter. Giverny Capital held the largest position in the company with around 718,995 shares worth $110,682,090.
HEICO Corporation (NYSE:HEI) stock is rated “Strong Buy” by 10 analysts. Among the 9 analysts providing 12-month price forecasts, the average target is $233.56, ranging from $184 to $250. This indicates a modest potential upside of 2.43% from the current stock price of $228.03.
Overall HEI ranks 7th on our list of the most profitable stocks of the last 20 years. You can visit 20 Most Profitable Stocks of the Last 20 Years to see the other profitable stocks that are on hedge funds’ radar. While we acknowledge the potential of HEI as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than HEI but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
