Stock of the Day

January 10, 2020

HEICO (HEI)

$225.90
+$0.36 (+0.2%)
Market Cap: $31.31B

About HEICO

HEICO Corporation, through its subsidiaries, designs, manufactures, and sells aerospace, defense, and electronic related products and services in the United States and internationally. Its Flight Support Group segment provides jet engine and aircraft component replacement parts; thermal insulation blankets and parts; renewable/reusable insulation systems; and specialty components. This segment also distributes hydraulic, pneumatic, structural, interconnect, mechanical, and electro-mechanical components for the commercial, regional, and general aviation markets; and offers repair and overhaul services for jet engine and aircraft component parts, avionics, instruments, composites, and flight surfaces of commercial aircraft, as well as for avionics and navigation systems, and other instruments utilized on military aircraft. The company's Electronic Technologies Group segment provides electro-optical infrared simulation and test equipment; electro-optical laser products; electro-optical, microwave, and other power equipment; electromagnetic and radio frequency (RF) interference shielding and suppression filters; power conversion and interface; interconnection devices; and underwater locator beacons and emergency locator transmission beacons. This segment also offers traveling wave tube amplifiers and microwave power modules; memory products and specialty semiconductors; harsh environment connectivity products and custom molded cable assemblies; RF and microwave products; communications and electronic intercept receivers and tuners; self-sealing auxiliary fuel systems; active antenna systems and airborne antennas; nuclear radiation detectors; silicone products; power amplifiers; ceramic-to-metal feedthroughs and connectors; technical surveillance countermeasures equipment; RF receivers and sources; embedded computing solutions; test sockets and adapters; and radiation assurance services. The company was incorporated in 1957 and is headquartered in Hollywood, Florida.

HEICO Bull Case

Here are some ways that investors could benefit from investing in HEICO Co.:

  • HEICO Co. has shown strong financial performance, with a recent earnings report indicating an EPS of $0.99, surpassing analysts' expectations of $0.97. This suggests robust profitability and effective management.
  • The stock price of HEICO Co. is currently at $239.02, reflecting a 0.4% increase, which indicates positive market sentiment and potential for further growth.
  • Institutional investors and hedge funds own 27.12% of HEICO Co.'s stock, which often signals confidence in the company's future performance and stability.
  • Recent upgrades from analysts, including a price target increase from Morgan Stanley to $265.00, suggest that market experts see potential for appreciation in HEICO Co.'s stock value.
  • HEICO Co. has a solid balance sheet with a debt-to-equity ratio of 0.60, indicating a manageable level of debt relative to equity, which can be a sign of financial health and lower risk for investors.

HEICO Bear Case

Investors should be bearish about investing in HEICO Co. for these reasons:

  • The stock has a high price-to-earnings (P/E) ratio of 65.37, which may indicate that it is overvalued compared to its earnings, potentially leading to a price correction.
  • HEICO Co. has a relatively high price-to-earnings-growth (PEG) ratio of 3.22, suggesting that the stock may be expensive relative to its growth rate, which could deter value-focused investors.
  • Despite recent positive performance, the stock has a 1-year high of $283.60, indicating that it may be approaching its peak, which could limit future upside potential.
  • The trading volume for HEICO Co. has been lower than its average, which may indicate reduced investor interest and could lead to increased volatility.
  • With a quick ratio of 1.34, while still above 1, it suggests that the company may have some liquidity concerns in meeting short-term obligations, which could be a red flag for risk-averse investors.

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