Why HEICO's Shares Popped

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of aerospace and defense contractor HEICO (NYSE: HEI  ) rose 10% today after the company released earnings.

So what: In the fiscal third quarter, the company's sales rose 15% to $256.0 million and net income rose 13% to $23.1 million, or $0.43 per share. Analysts only expected a $0.41-per-share profit, so the results were better than expected.

Management also said that fiscal 2012 sales would be around $890 million and net income would grow 13% to 14%. This was at the high end of its previous guidance.

Now what: HEICO is growing well, and it's always a welcome sign when you top your own expectations. The full-year results weren't out of line with analyst expectations, and although the quarter was better than expected, it didn't blow my socks off. The stock still trades at 24 times 2012 earnings estimates, a price that would have me selling after the pop we experienced today.

Interested in more info on HEICO? Add it to your watchlist by clicking here.

Fool contributor Travis Hoium does not have a position in any company mentioned. You can follow Travis on Twitter at @FlushDrawFool, check out his personal stock holdings or follow his CAPS picks at TMFFlushDraw.

Motley Fool newsletter services have recommended buying shares of HEICO. The Motley Fool has a disclosure policy. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.

 

 


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