Liberty Posted February 23, 2018 Author Share Posted February 23, 2018 If you have access, there's a good writeup with a fairly in-depth historical and strategic overview of Heico on the VIC that was published recently. I learned a few things about the company's early days... Link to comment Share on other sites More sharing options...
Liberty Posted February 27, 2018 Author Share Posted February 27, 2018 New acquisition for the ETG: https://seekingalpha.com/pr/17085634-heico-corporation-acquires-radiation-detection-leader Sensor Tech, which was founded in 1996 and is located in Goleta, CA, a neighboring city of Santa Barbara, is the leading designer and manufacturer of sophisticated nuclear radiation detectors for law enforcement, homeland security and military applications. Sensor Tech is well known for its highly sensitive, reliable and easy-to-use detectors, including its critically acclaimed Radiation Pager, which is the most sensitive radiation detector for its size commercially available and is hundreds of times more sensitive than Geiger-Muller (GM) detectors of similar size. Sensor Tech’s two founders own the remaining 15% of the business and will continue to manage it in their existing roles. HEICO stated that it does not expect any staff turnover to result from the acquisition. Link to comment Share on other sites More sharing options...
Liberty Posted February 27, 2018 Author Share Posted February 27, 2018 Q4: https://www.businesswire.com/news/home/20180227006585/en/ First Quarter of Fiscal 2018 Net Income up 59% on Operating Income Increase of 23% and Net Sales Increase of 18% Link to comment Share on other sites More sharing options...
Liberty Posted April 17, 2018 Author Share Posted April 17, 2018 Bolt-on in Newfoundland: https://www.businesswire.com/news/home/20180417005365/en/HEICO-Corporation-Subsidiary-Acquires-Flight-Critical-Aerospace Link to comment Share on other sites More sharing options...
Liberty Posted May 29, 2018 Author Share Posted May 29, 2018 Q2: https://www.businesswire.com/news/home/20180529006223/en/HEICO-Corporation-Reports-Record-Net-Sales-Operating Link to comment Share on other sites More sharing options...
Liberty Posted June 12, 2018 Author Share Posted June 12, 2018 One more stock split... Kind of pointless to do them so often at 5:4... Wish they'd do 2:1 of they really don't want to be above 100/share... The release mentions that since 1990 the stock has a 23% CAGR. https://www.businesswire.com/news/home/20180612005838/en/HEICO-Corporation-Declares-5-for-4-Stock-Split-Increases Link to comment Share on other sites More sharing options...
mwtorock Posted June 12, 2018 Share Posted June 12, 2018 Wish there is dip to buy... Link to comment Share on other sites More sharing options...
Liberty Posted June 12, 2018 Author Share Posted June 12, 2018 Wish there is dip to buy... It think it dropped 6% after last earnings, but that didn't last long. Link to comment Share on other sites More sharing options...
Liberty Posted July 31, 2018 Author Share Posted July 31, 2018 https://www.iata.org/pressroom/pr/Pages/2018-07-31-01.aspx The International Air Transport Association (IATA) announced that it has entered into an agreement with CFM International (CFM) that will lead to increased competition in the market for maintenance, repair and overhaul services (MRO) on engines manufactured by CFM, a 50/50 partnership between GE and Safran Aircraft Engines. [...] Under the agreement, CFM has adopted a set of “Conduct Policies” that will enhance the opportunities available to third-party providers of engine parts and MRO services on the CFM56 and the new LEAP series engines. Among the many elements of the agreement, CFM has agreed to: License its Engine Shop Manual to an MRO facility even if it uses non-CFM parts Permit the use of non-CFM parts or repairs by any licensee of the CFM Engine Shop Manual Honor warranty coverage of the CFM components and repairs on a CFM engine even when the engine contains non-CFM parts or repairs Grant airlines and third-party overhaul facilities the right to use the CFM Engine Shop Manual without a fee Sell CFM parts and perform all parts repairs even when non-CFM parts or repairs are present in the engine Link to comment Share on other sites More sharing options...
Liberty Posted August 27, 2018 Author Share Posted August 27, 2018 HEI Q2 (fiscal Q3): https://www.businesswire.com/news/home/20180827005565/en/ "Net Income up 47% on Operating Income Increase of 33% and Net Sales Increase of 19%" "consolidated operating margin improved to 21.8% in the third quarter of fiscal 2018, up from 19.4% ... Our net debt to EBITDA ratio improved to 1.27x as of July 31, 2018 compared to 1.67x... Cash flow provided by operating activities increased 34%" "During fiscal 2018, we have successfully completed three acquisitions and have completed four acquisitions over the past year... [guidance] 2018 YoY net sales +15%-16%, net income of +35%-37%, up from our prior growth estimates of 13%-14% and 33%-35%" Flight Support Group Q2 organic growth: 10% Electronic Technologies Group Q2 organic growth: 16% Link to comment Share on other sites More sharing options...
gary17 Posted August 28, 2018 Share Posted August 28, 2018 This seems quite expensive now! i calculate TTM FCF multiple of > 30.... Link to comment Share on other sites More sharing options...
Liberty Posted August 28, 2018 Author Share Posted August 28, 2018 This seems quite expensive now! i calculate TTM FCF multiple of > 30.... They get a pretty decent benefit from tax reform and that still hasn't made its way completely through the snake, so that helps with the fwd multiple, but yeah, def not as cheap as it was a couple years ago. Link to comment Share on other sites More sharing options...
Liberty Posted August 30, 2018 Author Share Posted August 30, 2018 https://www.businesswire.com/news/home/20180830005217/en/HEICO-Corporation-Subsidiary-Acquires-Aftermarket-Avionics-Display Link to comment Share on other sites More sharing options...
big_triece Posted September 4, 2018 Share Posted September 4, 2018 https://www.investors.com/news/management/leaders-and-success/family-ties-help-this-ceo-take-small-aerospace-firm-into-orbit/ Link to comment Share on other sites More sharing options...
Liberty Posted November 1, 2018 Author Share Posted November 1, 2018 New acquisition: https://www.businesswire.com/news/home/20181101005749/en/ Ballston Spa, NY-based SSP is a leading designer and manufacturer of silicone materials for a variety of demanding applications, used in aerospace, defense, research, oil and gas, testing, pharmaceuticals and other markets. [...] HEICO stated that it expects the acquisition to be accretive to its earnings in the year following the purchase. Further financial terms and details were not disclosed. Ballston Spa, NY-based SSP is a leading designer and manufacturer of silicone materials for a variety of demanding applications, used in aerospace, defense, research, oil and gas, testing, pharmaceuticals and other markets. SSP will be part of HEICO’s Electronic Technologies Group, which is comprised of businesses that specialize in the design and manufacture of highly-engineered, mission-critical products that must successfully operate in the harshest environments. Since SSP’s founding in 1989, the company has been a consistent innovator and pioneer within the silicone manufacturing industry. SSP employs approximately 70 team members and operates out of one, 52,000 square foot, state-of-the-art facility in Ballston Spa, NY. Link to comment Share on other sites More sharing options...
Liberty Posted November 28, 2018 Author Share Posted November 28, 2018 New acquisition: https://www.businesswire.com/news/home/20181128005106/en/ HEICO Corporation (NYSE: HEI.A) (NYSE: HEI) today announced that its Electronic Technologies Group acquired approximately 93% of the stock of Apex Microtechnology, Inc. (“Apex”) in an all cash transaction. Members of Apex’s management own the balance of the firm. HEICO stated that it expects the acquisition to be accretive to its earnings in the year following the purchase. Further financial terms and details were not disclosed. Tucson, AZ-based Apex is the leading designer and manufacturer of precision power analog monolithic, hybrid and open frame components for a certain wide range of aerospace, defense, industrial, measurement, medical and test applications. Among Apex’s most recognized products are high-end Power Operational Amplifiers, PWM Amplifiers and Voltage References. Founded in 1980, Apex employs nearly 100 people at its state-of-the-art Tucson headquarters, engineering and production facility, as well as at international sales locations. Apex is known as a leader for consistently developing products that lead the industry in terms of performance, quality, and reliability. Link to comment Share on other sites More sharing options...
Liberty Posted December 17, 2018 Author Share Posted December 17, 2018 Q3 results: https://www.businesswire.com/news/home/20181217005813/en/HEICO-Corporation-Reports-Record-Net-Sales-Operating Fourth Quarter and Fiscal Year 2018 Net Income up 26% and 39% on Operating Income Increases of 16% and 23% and Net Sales Increases of 13% and 17% Link to comment Share on other sites More sharing options...
Liberty Posted February 1, 2019 Author Share Posted February 1, 2019 New acquisition: https://www.businesswire.com/news/home/20190201005305/en/HEICO-Corporation-Subsidiary-Acquires-Solid-Sealing-Technology Watervliet, NY-based SST is a leading designer and manufacturer of high-reliability ceramic-to-metal feedthroughs and connectors for demanding environments within the defense, industrial, life science, medical, research, semiconductor, and other markets. Acquired 85% of it for all-cash. Price undisclosed. h/t @jerrycap Link to comment Share on other sites More sharing options...
Liberty Posted February 26, 2019 Author Share Posted February 26, 2019 Q4 results (their fiscal Q1): https://www.businesswire.com/news/home/20190226006172/en/HEICO-Corporation-Reports-Record-Net-Income-Increases Net Income up 22% on Operating Income Increase of 23% and Net Sales Increase of 15% operating margin improved to 21.0% in the Q1 of fiscal 2019, up from 19.7% in Q1 of 2018... Our net debt to EBITDA ratio was 1.17x... we completed six acquisitions over the past year... plan to utilize our financial flexibility to aggressively pursue high quality acquisitions Flight Support Group organic growth of 13%. Electronic Technologies Group organic growth of 12%. From the call: FSG: the 13% [organic growth] was pretty much all volume. And when you think about it compared to other people in the market, 13% or say 12% or 13% is probably volume, that's tremendous. Price is still, we are very conservative on that. We want to make sure that we delivered a very good value. So it was really just the volume increase. Link to comment Share on other sites More sharing options...
Liberty Posted February 28, 2019 Author Share Posted February 28, 2019 Acquisition at FSG: https://www.businesswire.com/news/home/20190228005240/en/HEICO-Corporation-Subsidiary-Acquires-Decavo-LLC HEICO Corporation (NYSE:HEI) (NYSE:HEI.A) today announced that its Flight Support Group acquired 80.1% of Decavo, LLC ("Decavo") in an all cash transaction. Hood River, Oregon-based Decavo designs and produces complex composite parts and assemblies incorporated into camera and related sensor assemblies and UAV airframes used in demanding defense and civilian applications. Link to comment Share on other sites More sharing options...
Liberty Posted March 1, 2019 Author Share Posted March 1, 2019 Thanks for bringing this back up, Liberty. Sorry if this has been covered before but I'm curious to get your thoughts on TDG vs. HEICO today. My main issues with HEICO are (1) less focus on proprietary / sole-source products vs. TDG, and (2) a lot of non-PMA parts, which I recently heard cannot be used in leased aircraft (at least on the commercial side). I think commercial aviation leasing has a lot of tailwinds and wouldn't be surprised if it continues to gain share vs. owned aircraft, so in that sense it feels like HEICO may be playing in a shrinking piece of the pie. And in general, given the low dollar amount per average part at TDG, I'm inclined to believe that you're really only saving a few cents by using non-certified parts in exchange for basically unlimited downside and reputational risk if a plane does indeed come down. Do let me know if I'm wrong on any of this. TDG definitely has a better business all else equal. But I don't think all else is equal.. Heico is very conservative financially and seems to be very employee-friendly, run by a family of owners that bought most of their stock (and don't just have a crazy number of options). TDG uses a lot of leverage, is pretty aggressive with pricing and, based on some reports, doesn't seem to be very employee-friendly (lots of cuts, kind of a cutthroat culture... but that's just what I've heard). Heico mostly grows through volume, taking a shared economics approach of sharing more of the value with its customers, which certainly helps them as they introduce hundreds of new parts each year. They also have a really good M&A track record and have been going up the quality ladder over time, driving up their margins. And yet Heico as a stock hasn't been doing that much worse than TDG if you look at a decent period (say about the past 10 years). Seems much safer, better liked by customers, less of a regulatory moat, and more focused on building the right culture for the long term, with untapped pricing power if they ever need it. It's riding a lot of the same secular tailwinds, and recently some new avenues have been opening up (recent EU decision..). I think the idea that nobody cares about the price of TDG parts might not be quite as right as TDG would want us to believe. If that was the case, I don't think the OEMs would be trying to muscle back in the space, and Heico wouldn't have the organic growth it has (almost all in volume, while TDG's organic growth includes a bunch of price). I think they're both great companies, but it feels like Heico will probably lead you close to the same place over time without running everything close to the redline. That feels a bit more comfortable to me. I've owned TDG in the pasts, so I'm not negative on it. It just has different trade-offs. Link to comment Share on other sites More sharing options...
Spekulatius Posted March 2, 2019 Share Posted March 2, 2019 ^ well stated, imo. I don’t own either one, but Heiko is the one I would pick. Link to comment Share on other sites More sharing options...
Liberty Posted May 28, 2019 Author Share Posted May 28, 2019 Q1: https://www.businesswire.com/news/home/20190528005756/en/ "Net Income up 37% on Operating Income Increase of 30% and Net Sales Increase of 20%... operating margin 23.1%.. cashflow +72% last 6 month" Guidance: "we now estimate our consolidated fiscal 2019 year-over-year growth in net sales to be 12% - 13% and in net income to be 17% - 18%, up from our prior growth estimates in net sales of 9% - 11% and in net income of 11% - 13%" Link to comment Share on other sites More sharing options...
peterHK Posted May 31, 2019 Share Posted May 31, 2019 I could never get comfortable with TDG because of the pricing issue. It brings back memories of Valeant (thought without the fraud) where they're gouging the customer because they can (which speaks to the competitive advantages of the business). The issue with that is people get tired of this, and I see a risk that over time as more pressure is placed on the US budget from social security and a US populace that is tired of being the worlds policeman, you're going to see more pressure from the government over pricing, which threatens TDG's defense business. HEI could play the pricing game, but they don't. In this case, even though HEI is not as well competitively positioned as TDG, I'd rather be long the sustainable business model vs. the gouging one where you risk big big downside if people ever figure out a way to get away from it. Heico is, of course, a beast of a company with a fantastic record so I'm not sad I'm missing out on TDG if I get to participate with HEI and feel good about it. Link to comment Share on other sites More sharing options...
Liberty Posted May 31, 2019 Author Share Posted May 31, 2019 I posted some highlights from the most recent call in this thread, if anyone's interested: Some about the company culture, about their long-term thinking, capital allocation, etc. Link to comment Share on other sites More sharing options...
Recommended Posts
Create an account or sign in to comment
You need to be a member in order to leave a comment
Create an account
Sign up for a new account in our community. It's easy!
Register a new accountSign in
Already have an account? Sign in here.
Sign In Now