HEICO Corporation

“HEICO is among the most durable industrial compounders in U.S. equities — a self-reinforcing FAA-certified PMA parts franchise run by an aligned owner-operator family that has delivered ~15% annual compounding for three decades. The moat is wide and widening, the reinvestment runway is long, and the risk of permanent business impairment is genuinely low. However, at 57x trailing earnings and 47x free cash flow, the stock prices in a decade of perfection with no margin of safety. Base-case 5-year returns are ~3-4% annually, worse than bonds. The investment thesis is not 'avoid this business' — it is 'wait for the price to create a return.' A 25-35% drawdown would transform HEICO from an expensive holding into a high-conviction BUY; until then, TRACK and be patient.”