HEICO Corporation’s (HEI.A, Financial) largest segment designs, manufactures and sells FAA-approved jet engine and other aircraft replacement parts, typically at price points below those offered by original equipment manufacturers (OEMs). With airlines all but grounded, aftermarket demand for HEICO parts and overhaul services has surely suffered. However, we think it is unlikely that air travel is permanently impaired. As planes return to service, HEICO’s value proposition will help them gain market share. HEICO’s conservative balance should allow them to not only survive this temporary halt but to continue their strategy of bolt-on acquisitions at attractive prices to accelerate business value growth.
From Wallace Weitz (Trades, Portfolio)'s Hickory Fund first-quarter 2020 shareholder commentary.
