NZS Capital, LLC, an investment management company, released its “NZS Growth Equity Strategy” first quarter 2025 investor letter. A copy of the letter can be downloaded here. The strategy returned -3.45% (net return of -3.61%) for the first quarter compared to -1.35% for the Morningstar Global Target Market Exposure (NR) index over the same period. Markets were volatile this quarter, especially in the IT sector and growth stocks in the US. Despite being overweight in these areas, the firm is pleased with its strategy’s resilience. In addition, you can check the fund’s top 5 holdings to determine its best picks for 2025.
In its first-quarter 2025 investor letter, NZS Capital highlighted stocks such as HEICO Corporation (NYSE:HEI). HEICO Corporation (NYSE:HEI-A) engages in the design and manufacturing of aerospace, defense, and electronic-related products and services. The one-month return of HEICO Corporation (NYSE:HEI) was 6.40%, and its shares gained 21.68% of their value over the last 52 weeks. On May 1, 2025, HEICO Corporation (NYSE:HEI) stock closed at $257.19 per share with a market capitalization of $31.388 billion.
NZS Capital stated the following regarding HEICO Corporation (NYSE:HEI) in its Q1 2025 investor letter:
“FOCUS POSITION: HEICO Corporation (NYSE:HEI), “Your airline’s favorite supplier”: The north star of our business and investment process is non-zero sumness. We spend our days in search of companies creating more value in their ecosystem than they take, as we believe these businesses tend to be both more resilient to disruption, as well as the source of disruption to profit-maximizing incumbents.
HEICO is a resilient holding and an excellent example of a high-NZS business within the zero-sum industry of aircraft aftermarket parts. HEICO supplies aftermarket parts and services to the airline industry, as well as electronic components to the broader aerospace and defense industry. Long-term operators Larry, Eric, and Victor Mendelson (who assumed control of HEICO in 1990 and transformed the business into what it is today) run the business in a hyper-decentralized fashion with a customer-centric and entrepreneurial culture…” (Click here to read the full text)
A fighter jet in formation, revealing the prowess of the companies defense arm.
HEICO Corporation (NYSE:HEI) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 67 hedge fund portfolios held HEICO Corporation (NYSE:HEI) at the end of the fourth quarter which was 57 in the previous quarter. While we acknowledge the potential of HEICO Corporation (NYSE:HEI) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
In addition, please check out our hedge fund investor letters Q1 2025 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.