Company executives and directors have the most up-to-date information on their firms' prospects. If these insiders are buying company stock, investors should pay attention.
In this report, we are going to highlight some bullish insider buying at HEICO Corporation (HEI:US). HEICO is an aerospace and electronics company that is focused on niche markets. It specializes in the manufacturing of high-reliability parts and components for aircraft, spacecraft, defense equipment, medical equipment, and telecommunications systems. The company is listed on the New York Stock Exchange and currently has a market capitalization of $17.0 billion.
HEICO: Insider Buying
Form 4 filings show that on 16 January, HEICO’s Chairman and CEO Laurans A. Mendelson purchased 1,054 Class A common shares in the company. This purchase cost the insider approximately $125,000.
This insider purchase is significant due to the fact that Mendelson has served as Chairman of the Board since December 1990. He has also served as Chief Executive Officer since February 1990. This experience means he is likely to have an excellent understanding of the company’s future prospects.
It’s also worth pointing out that after Mendelson last purchased HEICO stock, in October 2018, the stock rose 42% over the next year on the back of strong company results.
2021 RecoveryHEICO’s financial performance was impacted by the coronavirus last year. For the fiscal year ended 31 October 2020, net income was $314.0 million compared to $327.9 million the year before. One reason for this performance was that the company has exposure to the commercial aerospace industry, which experienced a substantial decline in 2020.
However, the fourth quarter of the year showed significant improvement on the third quarter. Compared to Q3, net sales, operating income, and net income improved 10%, 30%, and 15% respectively.
Looking ahead, the company said that the pandemic is likely to continue impacting the commercial aerospace industry and the company. However, it also said that it is cautiously optimistic that the recent vaccine progress may generate increased commercial air travel and result in a gradual recovery in demand for its commercial aerospace parts and services commencing in fiscal 2021.
In light of this outlook, we see the insider buying here as bullish. It suggests that the Chairman and CEO expects the stock to rise.