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Are Insiders Foreseeing Bad Times Ahead For Palo Alto Networks Inc. (PANW) and Two Other Companies?

Heico Corp (NYSE:HEI) had one of its executives report the sale of some shares this past week. Thomas S. Irwin, Senior Executive Vice President, sold 15,000 units of common stock on Thursday at a price of $58.63 per unit, trimming his stake to 70,739 units. Mr. Irwin also owns 89,388 Class A shares of common stock, along with an additional 133,231 shares of common stock held in the Irwin Family Irrevocable Trust. Heico has two classes of common stock: Heico Class A common stock traded under the ticker “HEI.A” and Heico Common stock traded under the ticker “HEI”. The two classes of common stock are virtually the same, save for voting rights: Heico Class A common stock carries one-tenth of a vote per share and Heico common stock carries one vote per share.

Heico Corporation’s business operations involve designing, manufacturing and distributing certain niche aviation, defense, space, medical, telecommunications and electronics products. The company mainly operates through two main business segments: the flight support group (FSG) and the electronic technologies group (ETG). Heico’s consolidated net sales for the first quarter of fiscal 2016 that ended January 31 totaled $306.23 million, which increased from $268.19 million reported for the same quarter of the prior year. The 14% increase reflects a 12% rise in net sales within the FSG segment and a 17% increase within the ETG segment. To be more detailed, the increase in FSG net sales were mainly driven by the company’s acquisitions, as well as additional net sales from its specialty products and aftermarket replacement parts product lines. Meanwhile, ETG net sales were positively impacted by acquisitions and organic growth of roughly 4%, which was in turn driven by higher net sales from certain space and defense products. Net income for the first quarter grew to $31.27 million, or $0.46 per diluted share, from $27.64 million, or $0.41 per diluted share, reported a year ago.

The share price of Heico’s common stock has gained 9% since the beginning of 2016 and could keep rising higher should the company manage to successfully reach its fiscal 2016 top- and bottom-line guidance figures. The management anticipates fiscal 2016 net sales to grow in the range of 14%-to-16%, while net income is expected to reach a growth rate of 10%-to-13%. Even so, Heico’s common stock is currently trading at a fat forward P/E ratio of 23.7, which is significantly higher than the forward P/E multiple of 15.9 for the Aerospace and Defense industry. Ken Fisher’s Fisher Asset Management owned 1.02 million shares of common stock of Heico Corp (NYSE:HEI) at the end of December.

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