Revenue minus cost of goods sold. Graham's ≥40% threshold identifies businesses with durable pricing power. Note: software and financial companies naturally exceed this; retailers and manufacturers rarely reach it due to their cost structures.
Operating Margin22.7%
Profit after operating costs before interest and taxes. A consistent ≥15% operating margin signals a business with real competitive advantages. Capital-intensive industries (airlines, auto, commodities) rarely hit this threshold due to their structural cost base — compare within industry for context.
Net Income Margin15.4%
Bottom-line profit as a percentage of revenue. The ≥20% target reflects Buffett's preference for highly profitable businesses. Financial engineering (buybacks, tax optimisation) can inflate this temporarily — look for consistency across multiple years rather than a single strong result.
Financial Health
C
Years to Pay Off Debt3.2 yrs
Total Debt ÷ Net Income. Lower = stronger balance sheet. Important caveat: utilities, telecoms, REITs, and infrastructure companies carry large structural debt by design — their bond-like cash flows service it comfortably at ratios that would alarm Graham. Compare within sector.
Working Capital vs Long-Term Debt-$640M
Working Capital minus Long-Term Debt. Negative results are common and expected in capital-return-focused businesses like Apple, Domino's, and McDonald's — where aggressive buybacks and dividends intentionally reduce book equity. This does not indicate financial distress in high-FCF businesses.
Working Capital$1.5B
Current Assets minus Current Liabilities. Negative working capital can be a deliberate efficiency strategy in businesses that collect cash before paying suppliers (retailers, fast food franchises, subscription businesses). Assess alongside free cash flow generation for full context.
Valuation
F
Margin of Safety0.0%
How far below the Graham Number the stock trades. Graham required a 33% discount as a buffer against analytical error. However, the Graham Number itself assumes 1960s-era P/E and P/B norms — for modern asset-light businesses it often understates true intrinsic value, making 0% MoS appear misleadingly bad.
Price-to-Book4.32x
Market price vs book value per share. Rarely below 1.5x for quality businesses today. Intangible assets (brand, software, patents) don't appear on the balance sheet under accounting rules, making P/B artificially high for asset-light companies like software and consumer brands.
Cash Flow
A
Free Cash Flow$861M
Operating cash flow minus capital expenditures. Buffett's most important metric — cash a business actually generates for its owners after maintaining and growing its asset base. Consistently positive FCF is one of the strongest indicators of a durable, well-run business regardless of accounting profits.
CapEx % of Net Income10.6%
Capital expenditure as a share of net income. Low CapEx signals a capital-light business that doesn't need heavy reinvestment to sustain earnings — Buffett's ideal. High CapEx is structurally necessary in manufacturing, airlines, telecoms, and semiconductors. For these industries, a high reading reflects the business model, not poor management.
Owner Earnings$959M
Net Income + Depreciation & Amortisation − Capital Expenditures. Buffett's preferred measure of a company's true annual earning power — what could theoretically be distributed to owners without impairing the business. More reliable than reported EPS because it accounts for the capital cost of maintaining the business.
About HEICO Corporation
HEICO Corporation provides aerospace, defense, and electronic related products and services in the United States and internationally. Its Flight Support Group segment offers jet engine and aircraft component replacement parts; thermal insulation blankets and parts; renewable/reusable insulation systems; and specialty components and assemblies. This segment also distributes hydraulic, pneumatic, structural, interconnect, mechanical, and electro-mechanical components for the commercial, regional, and general aviation markets; and offers repair and overhaul services for jet engine and aircraft component parts, avionics, instruments, composites, and commercial aircraft surfaces, as well as for avionics and navigation systems, subcomponents, and other military aircraft instruments. The company's Electronic Technologies Group segment provides electro-optical infrared simulation and test equipment; electro-optical laser products; electro-optical, microwave, and other power equipment; electromagnetic and radio frequency (RF) interference shielding and suppression filters; power electronics; power conversion and interface products; interconnection devices; and underwater locator and emergency locator transmission beacons. This segment also offers traveling wave tube amplifiers and microwave power modules; memory products and specialty semiconductors; environment connectivity products and molded cable assemblies; RF and microwave products; communications and electronic intercept receivers and tuners; self-sealing auxiliary fuel systems; active antenna systems and airborne antennas; nuclear radiation detectors; power amplifiers; ceramic-to-metal feedthroughs and connectors; technical surveillance countermeasures equipment; RF receivers and sources; radiation assurance, embedded computing, and silicone solutions; test sockets and adapters; and electronic components and rotary joint assemblies. The company was incorporated in 1957 and is headquartered in Hollywood, Florida.
HEICO Corporation provides aerospace, defense, and electronic related products and services in the United States and internationally. Its Flight Support Group segment offers jet engine and aircraft component replacement parts; thermal insulation blankets and parts; renewable/reusable insulation systems; and specialty components and assemblies. This segment also distributes hydraulic, pneumatic, structural, interconnect, mechanical, and electro-mechanical components for the commercial, regional, and general aviation markets; and offers repair and overhaul services for jet engine and aircraft component parts, avionics, instruments, composites, and commercial aircraft surfaces, as well as for avionics and navigation systems, subcomponents, and other military aircraft instruments. The company's Electronic Technologies Group segment provides electro-optical infrared simulation and test equipment; electro-optical laser products; electro-optical, microwave, and other power equipment; electromagnetic and radio frequency (RF) interference shielding and suppression filters; power electronics; power conversion and interface products; interconnection devices; and underwater locator and emergency locator transmission beacons. This segment also offers traveling wave tube amplifiers and microwave power modules; memory products and specialty semiconductors; environment connectivity products and molded cable assemblies; RF and microwave products; communications and electronic intercept receivers and tuners; self-sealing auxiliary fuel systems; active antenna systems and airborne antennas; nuclear radiation detectors; power amplifiers; ceramic-to-metal feedthroughs and connectors; technical surveillance countermeasures equipment; RF receivers and sources; radiation assurance, embedded computing, and silicone solutions; test sockets and adapters; and electronic components and rotary joint assemblies. The company was incorporated in 1957 and is headquartered in Hollywood, Florida.
Metric Explanations
What each dimension measures and where the thresholds come from.
Gross Profit Margin
Revenue minus cost of goods sold. Graham's ≥40% threshold identifies businesses with durable pricing power. Note: software and financial companies naturally exceed this; retailers and manufacturers rarely reach it due to their cost structures.
Operating Margin
Profit after operating costs before interest and taxes. A consistent ≥15% operating margin signals a business with real competitive advantages. Capital-intensive industries (airlines, auto, commodities) rarely hit this threshold due to their structural cost base — compare within industry for context.
Net Income Margin
Bottom-line profit as a percentage of revenue. The ≥20% target reflects Buffett's preference for highly profitable businesses. Financial engineering (buybacks, tax optimisation) can inflate this temporarily — look for consistency across multiple years rather than a single strong result.
Years to Pay Off Debt
Total Debt ÷ Net Income. Lower = stronger balance sheet. Important caveat: utilities, telecoms, REITs, and infrastructure companies carry large structural debt by design — their bond-like cash flows service it comfortably at ratios that would alarm Graham. Compare within sector.
Working Capital vs Long-Term Debt
Working Capital minus Long-Term Debt. Negative results are common and expected in capital-return-focused businesses like Apple, Domino's, and McDonald's — where aggressive buybacks and dividends intentionally reduce book equity. This does not indicate financial distress in high-FCF businesses.
Working Capital
Current Assets minus Current Liabilities. Negative working capital can be a deliberate efficiency strategy in businesses that collect cash before paying suppliers (retailers, fast food franchises, subscription businesses). Assess alongside free cash flow generation for full context.
Margin of Safety
How far below the Graham Number the stock trades. Graham required a 33% discount as a buffer against analytical error. However, the Graham Number itself assumes 1960s-era P/E and P/B norms — for modern asset-light businesses it often understates true intrinsic value, making 0% MoS appear misleadingly bad.
Price-to-Book
Market price vs book value per share. Rarely below 1.5x for quality businesses today. Intangible assets (brand, software, patents) don't appear on the balance sheet under accounting rules, making P/B artificially high for asset-light companies like software and consumer brands.
Free Cash Flow
Operating cash flow minus capital expenditures. Buffett's most important metric — cash a business actually generates for its owners after maintaining and growing its asset base. Consistently positive FCF is one of the strongest indicators of a durable, well-run business regardless of accounting profits.
CapEx % of Net Income
Capital expenditure as a share of net income. Low CapEx signals a capital-light business that doesn't need heavy reinvestment to sustain earnings — Buffett's ideal. High CapEx is structurally necessary in manufacturing, airlines, telecoms, and semiconductors. For these industries, a high reading reflects the business model, not poor management.
Owner Earnings
Net Income + Depreciation & Amortisation − Capital Expenditures. Buffett's preferred measure of a company's true annual earning power — what could theoretically be distributed to owners without impairing the business. More reliable than reported EPS because it accounts for the capital cost of maintaining the business.
Mr. Market is currently offering HEICO Corporation at $337.10.
The business passes 5 of 7 of Graham's defensive criteria — adequate but not exceptional.
At $337.10, the stock trades at a 263% premium to its Graham Number of $92.75. Graham would consider this price speculative.
There is no margin of safety at the current price. Graham would advise patience and waiting for a better entry point.
Negative NCAV — liabilities exceed current assets. Common in capital-return businesses (buybacks, debt-funded dividends) and capital-intensive industries. Not automatically a warning sign..
Conclusion: This stock is better suited for Graham's Enterprising investor — one willing to devote time and skill to security selection.
Showing Key Metrics
Income Highlights
Metric
2025
2024
2023
2022
Gross Profit %
39.8%▲
38.9%▲
38.9%▼
39.1%
Operating Margin %
22.7%▲
21.4%▲
21.1%▼
22.5%
Net Income %
15.4%▲
13.3%▼
13.6%▼
15.9%
Diluted EPS
4.90▲
3.67▲
2.91▲
2.55
Balance Sheet Highlights
Metric
2025
2024
2023
2022
2021
Total Assets
$8.5B
$7.6B
$7.2B
$4.1B
N/A
Total Debt
$2.2B▼
$2.3B▼
$2.5B▲
$305M•
N/A
Working Capital
$1.5B▲
$1.4B▲
$1.2B▲
$732M•
N/A
Years to Pay Debt
3.18
4.38
6.19
0.87
N/A
Cash Flow Highlights
Metric
2025
2024
2023
2022
2021
Free Cash Flow
$861M▲
$614M▲
$399M▼
$436M•
N/A
Owner Earnings
$959M
$748M
$583M
$480M
N/A
CapEx % of Net Income
10.6%
11.3%
12.2%
9.1%
N/A
Income Statement
2025
2024
2023
2022
Tax Rate For Calcs
0
0
0
0
Normalized EBITDA
1,219,507
1,002,230
758,310
593,742
Net Income From Continuing Operation Net Minority Interest
690,385
514,109
403,596
351,675
Reconciled Depreciation
196,076
175,331
130,043
96,333
Reconciled Cost Of Revenue
2,698,580
2,355,943
1,814,617
1,345,563
EBITDA
1,219,507
1,002,230
758,310
593,742
EBIT
1,023,431
826,899
628,267
497,409
Net Interest Income
-129,877
-149,313
-72,984
-6,386
Interest Expense
129,877
149,313
72,984
6,386
Normalized Income
690,385
514,109
403,596
351,675
Net Income From Continuing And Discontinued Operation
690,385
514,109
403,596
351,675
Total Expenses
3,466,046
3,033,214
2,342,766
1,711,478
Total Operating Income As Reported
1,018,998
824,455
625,339
496,844
Diluted Average Shares
140,771
140,198
138,905
138,037
Basic Average Shares
139,048
138,455
137,185
136,010
Diluted EPS
0
0
0
0
Basic EPS
0
0
0
0
Diluted NI Availto Com Stockholders
690,385
514,109
403,596
351,675
Net Income Common Stockholders
690,385
514,109
403,596
351,675
Net Income
690,385
514,109
403,596
351,675
Minority Interests
-55,169
-44,977
-40,787
-38,948
Net Income Including Noncontrolling Interests
745,554
559,086
444,383
390,623
Net Income Continuous Operations
745,554
559,086
444,383
390,623
Tax Provision
148,000
118,500
110,900
100,400
Pretax Income
893,554
677,586
555,283
491,023
Other Income Expense
4,433
2,444
2,928
565
Other Non Operating Income Expenses
4,433
2,444
2,928
565
Net Non Operating Interest Income Expense
-129,877
-149,313
-72,984
-6,386
Interest Expense Non Operating
129,877
149,313
72,984
6,386
Operating Income
1,018,998
824,455
625,339
496,844
Operating Expense
767,466
677,271
528,149
365,915
Selling General And Administration
767,466
677,271
528,149
365,915
Gross Profit
1,786,464
1,501,726
1,153,488
862,759
Cost Of Revenue
2,698,580
2,355,943
1,814,617
1,345,563
Total Revenue
4,485,044
3,857,669
2,968,105
2,208,322
Operating Revenue
4,485,044
3,857,669
2,968,105
2,208,322
Balance Sheet
2025
2024
2023
2022
2021
Ordinary Shares Number
139,341
138,813
138,228
136,612
Share Issued
139,341
138,813
138,228
136,612
Net Debt
1,950,164
2,067,271
2,307,030
150,770
Total Debt
2,193,681
2,252,796
2,498,581
304,930
Tangible Book Value
-827,745
-1,078,192
-1,485,613
200,384
Invested Capital
6,473,264
5,866,251
5,624,073
2,896,410
Working Capital
1,524,362
1,398,441
1,190,000
731,871
Net Tangible Assets
-827,745
-1,078,192
-1,485,613
200,384
Capital Lease Obligations
25,736
23,422
20,503
14,656
Common Stock Equity
4,305,319
3,636,877
3,145,995
2,606,136
Total Capitalization
6,469,906
5,862,144
5,606,272
2,894,756
Total Equity Gross Minority Interest
4,379,175
3,697,406
3,193,151
2,975,907
Minority Interest
73,856
60,529
47,156
369,771
Stockholders Equity
4,305,319
3,636,877
3,145,995
2,606,136
Gains Losses Not Affecting Retained Earnings
5,581
-26,076
-40,180
-46,499
Other Equity Adjustments
5,581
-26,076
-40,180
-46,499
Retained Earnings
3,647,678
3,062,166
2,605,984
2,253,932
Additional Paid In Capital
650,667
599,399
578,809
397,337
Capital Stock
1,393
1,388
1,382
1,366
Common Stock
1,393
1,388
1,382
1,366
Total Liabilities Net Minority Interest
4,121,259
3,895,416
4,001,912
1,119,589
Total Non Current Liabilities Net Minority Interest
3,289,255
3,231,565
3,336,570
698,730
Other Non Current Liabilities
550,124
525,986
379,640
338,948
Preferred Securities Outside Stock Equity
467,358
366,156
364,807
252,587
Non Current Deferred Liabilities
107,186
114,156
131,846
71,162
Non Current Deferred Taxes Liabilities
107,186
114,156
131,846
71,162
Long Term Debt And Capital Lease Obligation
2,164,587
2,225,267
2,460,277
288,620
Long Term Debt
2,164,587
2,225,267
2,460,277
288,620
Current Liabilities
832,004
663,851
665,342
420,859
Other Current Liabilities
80,908
76,430
99,923
67,682
Current Deferred Liabilities
79,529
83,903
87,556
58,757
Current Deferred Revenue
79,529
83,903
87,556
58,757
Current Debt And Capital Lease Obligation
29,094
27,529
38,304
16,310
Current Capital Lease Obligation
25,736
23,422
20,503
14,656
Current Debt
3,358
4,107
17,801
1,654
Other Current Borrowings
3,358
4,107
17,801
1,654
Pensionand Other Post Retirement Benefit Plans Current
103,520
5,770
130,837
121,200
Payables And Accrued Expenses
538,953
470,219
439,559
278,110
Current Accrued Expenses
47,385
41,753
43,213
18,267
Interest Payable
16,690
17,462
18,705
329
Payables
491,568
428,466
396,346
259,843
Total Tax Payable
260,528
230,037
190,453
143,292
Income Tax Payable
19,982
33,534
8,547
12,455
Accounts Payable
231,040
198,429
205,893
116,551
Total Assets
8,500,434
7,592,822
7,195,063
4,095,496
Total Non Current Assets
6,144,068
5,530,530
5,339,721
2,942,766
Other Non Current Assets
579,294
476,427
386,265
311,135
Goodwill And Other Intangible Assets
5,133,064
4,715,069
4,631,608
2,405,752
Other Intangible Assets
1,471,440
1,334,774
1,357,281
733,327
Goodwill
3,661,624
3,380,295
3,274,327
1,672,425
Net PPE
431,710
339,034
321,848
225,879
Accumulated Depreciation
-407,747
-356,426
-312,826
-277,083
Gross PPE
839,457
695,460
634,674
502,962
Construction In Progress
21,812
35,432
25,867
14,533
Machinery Furniture Equipment
476,735
422,500
386,602
322,252
Buildings And Improvements
255,776
217,554
202,499
148,598
Land And Improvements
85,134
19,974
19,706
17,579
Current Assets
2,356,366
2,062,292
1,855,342
1,152,730
Other Current Assets
86,377
78,518
49,837
41,929
Prepaid Assets
41,929
26,045
Inventory
1,295,336
1,170,949
1,013,680
582,471
Finished Goods
715,286
684,578
622,395
285,024
Work In Process
119,611
99,107
79,789
59,739
Raw Materials
460,439
387,264
311,496
237,708
Receivables
756,872
650,722
620,777
388,826
Other Receivables
119,257
112,235
111,702
93,978
Accounts Receivable
637,615
538,487
509,075
294,848
Allowance For Doubtful Accounts Receivable
-10,249
-11,794
-12,621
-8,333
Gross Accounts Receivable
647,864
550,281
521,696
303,181
Cash Cash Equivalents And Short Term Investments
217,781
162,103
171,048
139,504
Cash And Cash Equivalents
217,781
162,103
171,048
139,504
Cash Flow
2025
2024
2023
2022
2021
Free Cash Flow
861,380
614,109
399,301
435,874
Repayment Of Debt
-550,000
-378,924
-990,593
-212,000
Issuance Of Debt
495,000
130,000
3,153,452
262,000
Capital Expenditure
-72,886
-58,261
-49,434
-31,982
Interest Paid Supplemental Data
128,967
148,899
54,143
6,037
Income Tax Paid Supplemental Data
213,665
114,851
138,667
80,995
End Cash Position
217,781
162,103
171,048
139,504
Beginning Cash Position
162,103
171,048
139,504
108,298
Effect Of Exchange Rate Changes
3,780
1,278
2,227
-6,988
Changes In Cash
51,898
-10,223
29,317
38,194
Financing Cash Flow
-150,677
-389,393
2,065,049
-33,833
Cash Flow From Continuing Financing Activities
-150,677
-389,393
2,065,049
-33,833
Net Other Financing Charges
-54,535
-89,439
-62,306
-35,773
Proceeds From Stock Option Exercised
-9,174
-21,961
-8,134
-23,594
Cash Dividends Paid
-31,968
-29,069
-27,370
-24,466
Common Stock Dividend Paid
-24,466
-23,002
Net Issuance Payments Of Debt
-55,000
-248,924
2,162,859
50,000
Net Short Term Debt Issuance
0
-13,924
-1,593
0
Short Term Debt Payments
0
-13,924
-1,593
0
Net Long Term Debt Issuance
-55,000
-235,000
2,164,452
50,000
Long Term Debt Payments
-550,000
-365,000
-989,000
-212,000
Long Term Debt Issuance
495,000
130,000
3,153,452
262,000
Investing Cash Flow
-731,691
-293,200
-2,484,467
-395,829
Cash Flow From Continuing Investing Activities
-731,691
-293,200
-2,484,467
-395,829
Net Other Investing Changes
3,981
4,264
5,647
-1,239
Net Investment Purchase And Sale
-32,958
-19,910
-18,892
-15,300
Net Business Purchase And Sale
-629,828
-219,293
-2,421,788
-347,308
Purchase Of Business
-629,828
-219,293
-2,421,788
-347,308
Capital Expenditure Reported
-72,886
-58,261
-49,434
-31,982
Operating Cash Flow
934,266
672,370
448,735
467,856
Cash Flow From Continuing Operating Activities
934,266
672,370
448,735
467,856
Change In Working Capital
-35,209
-121,374
-103,849
-45,999
Change In Other Working Capital
23,533
21,618
13,512
15,398
Change In Payables And Accrued Expense
52,771
32,492
79,059
71,286
Change In Accrued Expense
44,605
22,095
72,589
34,122
Change In Payable
8,166
10,397
6,470
37,164
Change In Account Payable
27,593
-9,823
10,975
25,567
Change In Tax Payable
-19,427
20,220
-4,505
11,597
Change In Income Tax Payable
-19,427
20,220
-4,505
11,597
Change In Prepaid Assets
15,423
-23,029
5,599
-10,077
Change In Inventory
-44,850
-132,934
-124,782
-89,186
Change In Receivables
-82,086
-19,521
-77,237
-33,420
Changes In Account Receivables
-75,576
-20,815
-65,595
-29,272
Other Non Cash Items
21,588
37,437
-26,062
-6,803
Stock Based Compensation
34,381
18,775
15,475
12,646
Asset Impairment Charge
0
7,500
0
0
Deferred Tax
-48,565
-22,002
-26,531
8,876
Deferred Income Tax
-48,565
-22,002
-26,531
8,876
Depreciation Amortization Depletion
196,076
175,331
130,043
96,333
Depreciation And Amortization
196,076
175,331
130,043
96,333
Amortization Cash Flow
141,661
126,203
89,765
66,076
Amortization Of Intangibles
141,661
126,203
89,765
66,076
Depreciation
54,415
49,128
40,278
30,257
Operating Gains Losses
20,441
17,617
15,276
12,180
Pension And Employee Benefit Expense
20,441
17,617
15,276
12,180
Net Income From Continuing Operations
745,554
559,086
444,383
390,623
5/7
Graham Score
Enterprising Investor
Requires deeper research. Suited for active investors.
Graham's Fair Value
$92.75
Margin of Safety
0%
Market Cap / Net Assets
4.2x
Net Assets: $4.4B
Warren's Owner Earnings
$959M
Latest fiscal year
Graham's 7 Criteria
Defensive Investor Checklist
5/7 — Enterprising Investor
✅
Adequate Size
Graham required companies large enough to withstand economic downturns. This threshold ($1.5B) is inflation-adjusted from Graham's original $100M — virtually all S&P 500 companies pass this today.
$4.5B
vs > $1.5B revenue
✅
Strong Financial Condition
Current assets must be at least twice current liabilities. Note: highly profitable companies (Apple, Domino's) often run negative or low working capital deliberately — they collect cash fast and stretch payables. A failing score here is not always a warning sign.
2.83x
vs Current Ratio > 2.0x
✅
Earnings Stability
Graham required uninterrupted positive earnings. Any loss year is a red flag for defensive investors. Growth companies and cyclicals may show occasional losses during investment cycles or downturns without being fundamentally unsound.
No loss years (4 yrs data)
vs No negative EPS years
✅
Dividend Record
Graham valued dividends as evidence of financial discipline and shareholder alignment. Many excellent modern businesses (Alphabet, Amazon, Berkshire Hathaway) pay no dividend, preferring to reinvest cash at high rates of return. Failing this criterion does not indicate a poor business — it may indicate a high-growth one.
0.07%
vs Uninterrupted dividends
✅
Earnings Growth
EPS grew from $2.55 to $4.90 over 3 years. Graham's 33% threshold was set over a 10-year period. Measured over fewer years (as here), the bar is proportionally lower. Share buybacks can also inflate EPS growth without reflecting underlying business improvement.
+92.2% EPS growth
vs > 33% EPS growth
❌
Moderate P/E Ratio
Graham's 15x P/E threshold was calibrated to 1960s market averages when interest rates were higher. Today's lower rate environment structurally supports higher multiples — the S&P 500 long-run average P/E is now closer to 20–25x. A stock trading at 20x is not automatically speculative in the modern context.
60.2x
vs P/E ≤ 15.0x
❌
Moderate Price-to-Book
Graham's 1.5x P/B threshold made sense when most company value was tangible. Today, intangible assets — brand, software, patents, network effects — rarely appear on the balance sheet. A high P/B in tech, pharma, or consumer brands often reflects intangible value, not overvaluation. P/FCF or EV/EBITDA are more reliable for asset-light businesses.
4.32x P/B (P/E×P/B: 260.0)
vs P/B ≤ 1.5x | P/E × P/B ≤ 22.5
Graham's 7 Criteria — Explained
What each criterion measures and why it matters.
✅ Adequate Size — $4.5Bvs > $1.5B revenue
Graham required companies large enough to withstand economic downturns. This threshold ($1.5B) is inflation-adjusted from Graham's original $100M — virtually all S&P 500 companies pass this today.
"The minimum size of an enterprise should be not less than $100 million of annual sales."
✅ Strong Financial Condition — 2.83xvs Current Ratio > 2.0x
Current assets must be at least twice current liabilities. Note: highly profitable companies (Apple, Domino's) often run negative or low working capital deliberately — they collect cash fast and stretch payables. A failing score here is not always a warning sign.
"For industrial companies, current assets should be at least twice current liabilities."
✅ Earnings Stability — No loss years (4 yrs data)vs No negative EPS years
Graham required uninterrupted positive earnings. Any loss year is a red flag for defensive investors. Growth companies and cyclicals may show occasional losses during investment cycles or downturns without being fundamentally unsound.
"The company should have shown no deficit in the past ten years."
✅ Dividend Record — 0.07%vs Uninterrupted dividends
Graham valued dividends as evidence of financial discipline and shareholder alignment. Many excellent modern businesses (Alphabet, Amazon, Berkshire Hathaway) pay no dividend, preferring to reinvest cash at high rates of return. Failing this criterion does not indicate a poor business — it may indicate a high-growth one.
"Some current dividend payments — for at least the past 20 years."
EPS grew from $2.55 to $4.90 over 3 years. Graham's 33% threshold was set over a 10-year period. Measured over fewer years (as here), the bar is proportionally lower. Share buybacks can also inflate EPS growth without reflecting underlying business improvement.
"A minimum increase of at least one-third in per-share earnings over ten years."
❌ Moderate P/E Ratio — 60.2xvs P/E ≤ 15.0x
Graham's 15x P/E threshold was calibrated to 1960s market averages when interest rates were higher. Today's lower rate environment structurally supports higher multiples — the S&P 500 long-run average P/E is now closer to 20–25x. A stock trading at 20x is not automatically speculative in the modern context.
"The price-earnings ratio should be no more than 15 times average earnings."
Graham's 1.5x P/B threshold made sense when most company value was tangible. Today, intangible assets — brand, software, patents, network effects — rarely appear on the balance sheet. A high P/B in tech, pharma, or consumer brands often reflects intangible value, not overvaluation. P/FCF or EV/EBITDA are more reliable for asset-light businesses.
"The price should not be more than 1½ times book value. P/E × P/B ≤ 22.5."
These metrics estimate what HEICO Corporation is worth based on fundamentals — independent of what the market prices it at.
Graham's Fair Value and NCAV are conservative floors.
EPV assumes zero growth. These are reference points, not price targets.
Net Current Asset Value
$-31.99
Negative NCAV — liabilities exceed current assets. Common in capital-return businesses (buybacks, debt-funded dividends) and capital-intensive industries. Not automatically a warning sign.
"Buy at two-thirds of net current assets." — Graham
Earnings Power Value
$205.22
Per share, no-growth floor. Compare to current price.
ROIC — Return on Invested Capital
10.5%
Return on Invested Capital — Buffett's preferred measure for asset-light businesses. ROIC > 15% consistently signals a durable competitive advantage (moat). More meaningful than P/B for software, pharma, and consumer brand companies where most value is intangible and off-balance-sheet.
"The management of a business is its most important single factor — more important than market position, patents, or financial structure."
— Benjamin Graham
Capital Allocation & Alignment
Insider Ownership
22.85%
High — management has strong skin in the game
Return on Equity (ROE)
16.0%
Excellent — management generates strong returns on equity
Return on Assets (ROA)
8.1%
Strong — management uses assets efficiently
Debt Trend YoY
-2.6% YoY
Debt is declining — management is deleveraging
Leadership Team
Eric Mendelson
Co-CEO, Co-President & Co-Chairman
Age 60
Pay: $5,507,761
0.798% of net income
Victor Mendelson
Co-CEO, Co-President & Co-Chairman
Age 58
Pay: $5,366,967
0.777% of net income
Carlos Macau Jr.
Executive VP, CFO & Treasurer
Age 58
Pay: $3,707,455
0.537% of net income
Top Institutional Holders
Institution
% Owned
Shares
Blackrock Inc.
7.46%
4,113,643
Capital International Investors
4.82%
2,661,900
Capital World Investors
4.29%
2,364,929
Vanguard Portfolio Management LLC
4.05%
2,235,217
State Street Corporation
3.15%
1,738,536
FMR, LLC
2.76%
1,524,632
Vanguard Capital Management LLC
2.42%
1,333,103
Morgan Stanley
1.86%
1,024,012
Risk Analysis
Beta (Market Risk)
1.03
Moderate volatility — moves slightly more than market
Short Interest
1.6% of float
Low short interest — market is not heavily bearish
Debt-to-Equity
0.48x
Conservative balance sheet — low financial risk
Current Ratio
2.92x
Strong liquidity — Graham approved
52-Week Price Range
Low: $256.11Current: $337.10High: $361.69
Currently at 77% of 52-week range
HEICO Corporation (HEI) fundamental analysis — Overall grade C based on profitability, financial health, valuation and cash flow. Graham's
Fair Value: $92.75. Margin of safety: 0%. Gross profit margin: 39.8%. Operating margin: 22.7%. Net margin: 15.4%. Market cap: $47.1B. Sector: Industrials. Industry: Aerospace & Defense. Analysis powered by 360investing — free fundamental stock analysis based on Benjamin Graham and Warren Buffett
principles.
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