Image Source: UnsplashHollywood, Fla.-based Heico Corp. (HEI) is the world’s largest independent producer of replacement aircraft parts. It is also a major supplier of niche subcomponents used in targeting and simulation by government and commercial aerospace and defense markets, writes John Dobosz, editor of Forbes Dividend Investor.Founded in 1957 as Heinicke Instruments, a manufacturer of medical laboratory equipment, the company branched into the aviation market with its acquisition of engine parts manufacturer Jet Avion in 1974.Over the past 50 years, Heico made more than 120 additional acquisitions — including three in a recent two-month span — to achieve wide-ranging exposure to industries including aviation, defense, space, medical, telecommunications, and electronics.Two-thirds of Heico’s $2.9 billion in revenue last year was generated in the United States, and its major customers include Lockheed Martin Corp. (LMT), Northrop Grumman Corp. (NOC), Arrow Electronics Inc. (ARW), Boeing Co. (BA), Airbus. and the US government.Reflecting the impact of both acquisitions and organic growth, revenue this year is expected to grow 31% to $3.88 billion, with earnings up 25% to $3.65 per share. Heico’s net sales increased 40% to $2.84 billion over the first nine months of fiscal 2024 compared to the first nine months of fiscal 2023.Operating income rose 39% to $605.8 million. Strength in commercial aerospace has driven the flight support group to 16 consecutive quarters of sequential net sales growth.There is no doubt that Heico is a growth stock. Earnings are forecast to grow 17% in 2025, and analysts expect long-term earnings growth of 16.5% annually. The stock trades at 59 times trailing earnings, a price multiple that does not suggest cheapness for value investors. But this is not far above its average P/E over the past five years of 51 times earnings.Big money investors seem to be bullish on Heico. Florida billionaire optometrist and inventor Herbert A. Wertheim, whom we profiled before, owns 7.5% of the outstanding shares, worth more than $1 billion. Ken Fisher’s Fisher Asset Management reported adding 34,000 shares in the second quarter for a total position of 315,000 shares as of June 28.Ken Griffin’s Citadel Advisors acquired 209,000 shares in the second quarter for total holdings of 241,000 shares at the end of the quarter. DE Shaw & Co. and Israel Englander’s Millennium were avid buyers in the April-June period, and Mario Gabelli is also a major shareholder.

About the Author
John Dobosz is responsible for money and investing coverage on Forbes.com and in Forbes magazine. Previously, he spent five years with Lou Dobbs at CNN Financial News, where he produced long-form pieces and reported on management, entrepreneurship, and financial markets.More By This Author:Top Picks For 2025: Nomura HoldingsTop Picks For 2025: Altria Group Top Picks 2025: Hercules Capital