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Is HEICO Corporation (HEI-A) Stock Trading at a Discount?

Giverny Capital, an investment management company, recently published its fourth-quarter investor letter in 2022. A copy of the same can be downloaded here. The model portfolio of the firm appreciated 8.49%, net of fees in the fourth quarter compared to a 7.56% return for the Standard & Poor’s 500 Index. For 2022, the fund delivered a -22.65% return compared to a -18.11% return for the Index. Oil and energy was the strongest sector in the year increased by 65%. In addition, you can check the top 5 holdings of the fund to see its best picks for 2022.

Giverny Capital highlighted stocks like HEICO Corporation (NYSE:HEI-A) in its Q4 2022 investor letter. Headquartered in Hollywood, Florida, HEICO Corporation (NYSE:HEI-A) offers aerospace, defense, and electronic-related products and services. On January 27, 2023, HEICO Corporation (NYSE:HEI-A) stock closed at $134.00 per share. One-month return of HEICO Corporation (NYSE:HEI-A) was 11.81%, and its shares gained 22.15% of their value over the last 52 weeks. HEICO Corporation (NYSE:HEI-A) has a market capitalization of $20.284 billion.

Giverny Capital made the following comment about HEICO Corporation (NYSE:HEI-A) in its Q4 2022 investor letter:

"The second five starts with HEICO Corporation (NYSE:HEI-A) Class A shares, which shed 6.8% of their value in 2022. Heico is the world’s largest supplier of private label aftermarket parts for the aviation industry. The US government regulates airline safety very tightly, such that getting regulatory approval for aftermarket parts is difficult. As a result, the original equipment manufacturers enjoy a near-monopoly on spare parts, allowing them to charge high prices. Over decades, Heico’s management has won approval for hundreds of parts and bought many smaller specialist parts makers. Today, Heico offers by far the largest alternative to expensive branded parts. I believe Heico has many years of growth ahead as it expands its parts catalog and becomes an even more vital resource to airlines and the defense industry.

As a side note, Heico is richly valued, but our A shares trade for about a 20% discount to the common stock despite having identical economic rights. The A shares don’t have voting rights, which would seem to warrant a smaller discount to the common than 20%."

aircraft fixer
aircraft fixer

Copyright: 36clicks / 123RF Stock Photo

HEICO Corporation (NYSE:HEI-A) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 42 hedge fund portfolios held HEICO Corporation (NYSE:HEI-A) at the end of the third quarter which was 39 in the previous quarter. In addition, please check out our hedge fund investor letters Q4 2022 page for more investor letters from hedge funds and other leading investors.


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