Vulcan Value Partners, an investment management firm, published its “Large Cap, Small Cap, Focus Composite, Focus Plus Composite, and All Cap” fourth quarter 2020 investor letter – a copy of which can be downloaded here. Vulcan’s Large Cap, Small Cap and All Cap strategies beat both their primary and secondary benchmarks, while Focus and Focus Plus trailed their primary benchmarks but beat their secondary benchmarks. You can view the fund’s top 5 holdings to have a peek at their top bets for 2021.
Vulcan Value Partners, in their Q4 2020 investor letter, mentioned HEICO Corporation (NYSE: HEI) and emphasized their views on the company. HEICO Corporation is a Hollywood, Florida-based aerospace and electronics company that currently has a $16.2 billion market capitalization. Since the beginning of the year, HEI delivered a -5.70% return, while its 12-month gains are still up by 66.43%. As of March 29, 2021, the stock closed at $122.97 per share.
Here is what Vulcan Value Partners has to say about HEICO Corporation in their Q4 2020 investor letter:
“HEICO Corp. is a leading manufacturer of FAA-approved jet engine and aircraft component Parts Manufacturer Approval (PMA) replacement parts. The company also produces various types of electronic equipment for the aviation, defense, space, medical, telecommunications, and electronics industries. HEICO differentiates itself from competitors by using its proprietary technology to redesign replacement parts and sell them for substantial discounts to OEM (original equipment manufacturer) replacement parts. The company represents a small but growing share of the market. HEICO has a long history of strong organic growth, expanding margins, and strong free cash flow generation. Additionally, its management team are exceptional capital allocators. The team seeks out smaller owner-run companies where the founder desires to sell yet stay involved in the business. In return, sellers are willing to transact with HEICO at lower prices than they would with other potential buyers. Through strategic acquisitions, HEICO has created a unique sustainable advantage in the industry that is difficult to replicate.”
Our calculations show that HEICO Corporation (NYSE: HEI) does not belong in our list of the 30 Most Popular Stocks Among Hedge Funds. As of the end of the fourth quarter of 2020, HEICO Corporation was in 44 hedge fund portfolios, compared to 43 funds in the third quarter. HEI delivered a decent -4.08% return in the past 3 months.