What happened

Investors in Heico (NYSE:HEI) had yet another super month, with their stock jumping 15.2% in May, according to data provided by S&P Global Market Intelligence. The gain came in the wake of the company's stellar second-quarter earnings report.

Both of the aerospace and electronics specialist's segments reported double-digit organic revenue growth, which led to a 30% increase in operating income in the second quarter. As such, management now expects full-year net sales to grow 15%-17% compared to a previous estimate of 11%-13%, and given the company's acquisitive nature, there could be more to come.

A passenger airplane taking off.

Image source: Getty Images.

So what

The last point leads neatly into one of the reasons why Heico has been one of the best-performing industrial stocks in the past year -- and over the last five years (up 349%) and the last decade (up 1,420%). In a nutshell, the aviation end markets have been very favorable since the last recession, with airlines experiencing a never-seen-before period of profitability

Of course, if the trend in your end markets is favorable, then it pays to be continually buying businesses in the industry, and that's exactly what Heico has done over the years. In a sense, it's made Heico a geared play on commercial aviation over the years.

The positive trend has continued in 2019, with aerospace being the standout performer in the industrial sector. For example, Honeywell, United Technologies and General Electric all repeated excellent aerospace-related earnings recently. 

Now what

CEO Laurans Mendelson made Heico's priorities very clear during the earnings call: "We have no significant debt maturities until fiscal 2023 and we plan to utilize our financial flexibility to aggressively pursue high-quality acquisitions in order to accelerate growth and maximize shareholder returns. This has been HEICO standard procedure for the past 25 years."

The company's forward P/E ratio of nearly 60 times earnings makes shares look expensive, but if Heico continues to benefit from favorable market trends, then the stock could have further to run.