Giverny Capital Asset Management, LLC, an investment management company, recently published its fourth-quarter 2023 investor letter. A copy of the same can be downloaded here. The firm’s model portfolio returned 16.26% (net) in the fourth quarter compared to an 11.69% return for the S&P 500 Total Return Index. The fund had an annual return of 29.07% compared to the 26.29% return for the Index during the same period. In addition, please check the fund’s top five holdings to know its best picks in 2023.
Giverny Capital Asset Management featured stocks such as HEICO Corporation (NYSE:HEI) in the fourth quarter 2023 investor letter. Headquartered in Hollywood, Florida, HEICO Corporation (NYSE:HEI) designs and manufactures electronic equipment for the aviation, defense, space, medical, telecommunications, and electronics industries. On February 5, 2024, HEICO Corporation (NYSE:HEI) stock closed at $184.99 per share. One-month return of HEICO Corporation (NYSE:HEI) was 8.43%, and its shares gained 6.21% of their value over the last 52 weeks. HEICO Corporation (NYSE:HEI) has a market capitalization of $22.296 billion.
Giverny Capital Asset Management stated the following regarding HEICO Corporation (NYSE:HEI) in its fourth quarter 2023 investor letter:
“We trimmed our HEICO Corporation (NYSE:HEI) Class A shares from 5% to 4% in the fourth quarter, another dubious decision considering we sold shares for about $132 and they finished the year a few weeks later at $142. Heico, which sells private label aftermarket parts to the aviation industry, is a great family-run business with an enormous growth runway, no pun intended. Like Kinsale, it has a tiny market share in its industry and a fantastic cost-position. It perpetually trades for an enormous price. We felt like 5% exposure to a PE multiple of roughly 35x was a little too much.
The sales of both Arista and Heico reflected my desire to manage PE multiple risk. I keep learning the hard way, however, that trimming your winners generally doesn’t add value. If the valuation is beyond justification, sell the position. If the valuation is high but the business continues to dominate its niche, grow steadily and add value for customers, maybe just take a walk around the block until the urge to sell goes away.”
A complex assembly line producing aircraft structures for aerospace applications.
HEICO Corporation (NYSE:HEI) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 46 hedge fund portfolios held HEICO Corporation (NYSE:HEI) at the end of third quarter which was 53 in the previous quarter. In addition, please check out our hedge fund investor letters Q4 2023 page for more investor letters from hedge funds and other leading investors.
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Disclosure: None. This article is originally published at Insider Monkey.
