HEICO Corporation (HEI, Financial) is an aerospace & defense company that manufactures FAA-approved parts and system sub-components. The stock price pulled back on profit taking and conservative guidance after a significant run-up in the first three quarters of 2019. We expect HEICO’s defense business to grow over the long term as government budget increases flow through to outlays. In addition, the aerospace business should ramp for the next decade as aircraft deliveries from a decade ago reach prime aftermarket maintenance age. The Boeing 737 MAX grounding also continues to help the aftermarket.
From Ron Baron (Trades, Portfolio)'s Baron Partners Fund fourth-quarter 2019 shareholder letter.
