TIP738: Heico: The Quiet Aerospace Compounder

In this episode, Clay dives deep into the remarkable story of Heico — a quiet compounder that’s delivered over 22% annual returns for more than three decades. While aerospace may seem like a commoditized or slow-moving industry, Heico flips that assumption on its head.

Clay breaks down how the Mendelson family transformed a struggling parts supplier into a $38 billion industry leader through exceptional capital allocation, a culture of ownership, and a nearly unbreakable moat built on regulatory mastery and being a partner that customers can trust. Whether you're an investor, entrepreneur, or business strategist, this episode offers timeless lessons on how to build and sustain a truly durable business.

IN THIS EPISODE YOU’LL LEARN: 00:00 - Intro 01:27 - The story of how the Mendelsons took a tiny parts supplier and turned it into a $38B aerospace powerhouse. 06:47 - How Heico turned strict FAA regulations into its biggest competitive advantage. 10:10 - Why airlines prefer Heico parts over the OEM alternatives. 17:50 - What makes Heico’s acquisition playbook similar to Berkshire Hathaway. 27:58 - Why Heico’s products and services are extremely sticky and provide predictable, recurring revenue streams. 37:25 - Why economic downturns benefit Heico, creating a countercyclical business model. 47:19 - How Heico’s culture is unique and has created hundreds of millionaire factory workers. And so much more!

Disclaimer: Slight discrepancies in the timestamps may occur due to podcast platform differences.

BOOKS AND RESOURCES

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Interview with Eric Mendelson.

50x Podcast with Nick Howley.

Book mentioned: Lessons from the Titans.

Related Episode: TIP731: Owning Best-In-Class Businesses w/ Joseph Shaposhnik.

Related Episode: TIP709: The Art of Long-Term Investing w/ Francois Rochon.

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