Giverny Capital Asset Management LLC, an investment management firm, published its fourth-quarter 2020 Investor Letter – a copy of which can be downloaded here. A net return of 15.39% was recorded by the fund for the Q4 of 2020, above its S&P 500 benchmark that returned 12.15%. You can view the fund’s top 10 holdings to have a peek at their top bets for 2021.
Giverny Capital, in their Q4 2020 Investor Letter said that they see a brighter future in HEICO Corporation (NYSE: HEI) because the company offers cheaper spare aircraft parts compared to the original equipment manufacturers and that accordingly, they will be the top choice of the debt-laden airlines. HEICO Corporation is an aerospace and electronics company that currently has a $15.3 billion market cap. For the past 3 months, HEI delivered a decent 17.23% return and settled at $122.13 per share at the closing of January 26th.
Here is what Giverny Capital Asset Management has to say about HEICO Corporation in their Investor Letter:
“Heico has a large business selling private label aftermarket parts to airlines. Obviously, with commercial jets flying fewer hours the airlines aren’t buying many spare parts. But Heico’s parts tend to cost a lot less than the authorized parts produced by original equipment manufacturers, and as debt-laden airlines will need to mind their pennies in the future, Heico should gain market share for years. It has a second unit selling sophisticated electrical components to the defense, aviation, space and electronics industries. This segment never missed a beat, growing income by 14% in the fourth quarter ended October 31.”
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Video: Top 5 Stocks Among Hedge Funds
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