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Is Heico Corp. (HEI) A Smart Long-Term Buy?

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Jose Karlo Mari Tottoc
·3 min read
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Conestoga Capital Advisors, a boutique, independent investment management firm, published its fourth-quarter 2020 ‘Small Cap Growth & SMid Cap Growth’ Investor Letter – a copy of which can be downloaded here. A net return of 31% was recorded by Conestoga’s Small Cap Growth fund and 19.72% return by its SMid Cap Growth Fund for the the end year 2020. Both performed below their Russell 2000 Growth and Russell 2500 Growth benchmarks that delivered a 34.63% and 25.89% return respectively. You can view the fund’s top 5 holdings to have a peek at their top bets for 2021.

Conestoga Capital Advisors, in their Q4 2020 investor letter, emphasized that HEICO Corporation (NYSE: HEI-A) is among their SMid Cap Growth Fund’s top 5 leaders. HEICO Corporation is a Florida-based aerospace company that offers products for aircraft, spacecraft, defense and medical equipment, telecommunications systems, and related fields. It currently has a $16 billion market capitalization. Since the beginning of the year, HEI-A is down -1.66%, but its 12-month gains is still up by 35.79%. As of March 5, the stock closed at $114.82 per share.

Here is what Conestoga Capital Advisors has to say about HEICO Corporation in their Q4 2020 investor letter:

"This company manufactures jet engine and aircraft replacement parts as electronic equipment for the defense, space medical and industrial industries. The stock performed well during the fourth quarter following upbeat efficacy data and subsequent FDA approval of several COVID-19 vaccine candidates, as a return to commercial air travel will drive demand for replacement parts."

Our calculations show that HEICO Corporation (NYSE: HEI-A) does not belong in our list of the 30 Most Popular Stocks Among Hedge Funds. As of the end of the fourth quarter of 2020, HEICO Corporation was in 44 hedge fund portfolios compared to 43 funds in the third quarter. HEI-A delivered a -5.92% return in the past 3 months.

The top 10 stocks among hedge funds returned 231.2% between 2015 and 2020, and outperformed the S&P 500 Index ETFs by more than 126 percentage points. We know it sounds unbelievable. You have been dismissing our articles about top hedge fund stocks mostly because you were fed biased information by other media outlets about hedge funds’ poor performance. You could have doubled the size of your nest egg by investing in the top hedge fund stocks instead of dumb S&P 500 ETFs. Here you can watch our video about the top 5 hedge fund stocks right now. All of these stocks had positive returns in 2020.

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 15 best innovative stocks to buy to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our website:

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