Stock Entry Point Article​

Heico Corporation

Aviation and aerospace have been hit quite badly during the current recession. However, Heico Corp news seems to be optimistic. The reason is the company’s diversification in other markets such as defense, telecommunication, medical, and even space. Heico Aerospace isn’t the dominant segment in the company’s portfolio. Half of its business actually comes from the segments mentioned above.

Additionally, the non-aerospace businesses grew at a faster pace than the aerospace businesses before the pandemic. In 2019, the commercial aerospace division grew at 13% with a net margin of 19.5% while the electronics segment grew at 19% with a net margin of 29.4%.

The defense and medical businesses of Heico Corporation have been exempt from local lockdown provisions. Besides, some of the equipment that Heico supplies is used in critical instruments like ventilators, PPE gear, and sterilization equipment.

Plus, the aerospace business isn’t all doom and gloom. In mid-April, the company said, “We believe our commercial aviation aftermarket revenues will recover faster than the overall market because aircraft operators will need to avail themselves of our cost-saving solutions and because of our robust product development programs.” If oil prices continue to remain low, then airline companies might lean towards using older aircraft more. After all, fuel efficiency is the major selling point of newer aircraft models.

In March 2020, Heico’s stock price halved from its February highs. However, prices have gone up by more than 43% since the crash. Heico Corp stock was priced at $88.51 on 19th May 2020 and is up 1.04% for the month.


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