A Business Turnaround With a Long and Profitable Runway
Tailwinds Incoming
I’ve had this stock on my watchlist for the last couple of weeks but neglected to dive into researching it because frankly, I’ve had a lot of good stock suggestions that peaked my interest presented to me via private messages here or on X. Now that I’ve knocked a couple of those companies off of my list I’ve turned my attention back to this business.
In my classic investment fashion this company has an EV significantly lower than their market cap, at $12.9 million over a market cap of $21.9 million. This company has been around since 1941 but has had a rough last couple of years. The headwinds that created these problems included Boeing’s 737ZMax problems, Covid-19 dampening travel, and a shift in defense spending priorities and posturing. This company also experienced some major problems with inventory discrepancies when they migrated to SAP from their MRP software format which caused problems with the company’s financial reporting. Now the company has a new CFO, has rectified their reporting issues, and is profitable once again. The other tailwinds this company was facing have now either faded away, like in the case of the COVID-19 travel restrictions, or have turned into tailwinds.
Boeing ($BA) has accelerated their orders, they’ve seen increased orders from Airbus ($EADSF), there’s been a resurgence in defense spending, and this company has seen growth from the commercial space launch industry from a company called Ascendant Spaceflight Services. The company plans to grow its future revenues by further expanding into the commercial space market. This company makes a very specific product that’s needed in all of these applications and is the only independent producer of this good in the United States. This should act as a moat within itself as the company’s largest revenue stream comes from defense spending and the U.S.’s military has to, when possible, source their materials from domestic suppliers. On top of all of this the company I’m talking about also plans to expand its products into the industrial and medical devices sectors as well.
IEH Corporation
The IEH Corporation ($IEHC) is a family managed business, that is currently being ran by the founder’s great-grandson, Mr. David Offerman. David has been at IEHC since 2004 and was elected as Chairman of the Board, President, and CEO in 2017 after the death of his father Michael Offerman. The company primarily makes Hyperboloid Connectors. These connectors are vital for processes where a constant unbreakable electrical flow is a must. These connectors can handle high amounts of shock and vibration and can handle very harsh environments making them ideal for air and space applications as well as other uses in the automotive, medical supply, and many other industrial processes. Hyperboloid connectors have a rather high current carrying capacity and a relatively low amount of force is needed to insert or extract hyperboloid connectors from their connections making them a convenient connection choice for an array of applications.
IEHC’s Problems
IEHC has been in the business for a very long time and before their recent profitability downturn that occurred from 2022 to 2024 the company saw 18 years of steady, profitable, and debt-free growth. Then COVID-19 happened, then Boeing’s scandalous controversy surrounding their 737Max problems happened. Both of these events in conjunction with a pull back in defense revenues led IEHC to suffer a couple of years of net losses, which were met with a subsequent pull back in IEHC’s share price.
The other event that led to IEHC’s share price tumble occurred in 2021 when the company became unable to file their financials with the SEC due to major problems regarding inventory discrepancies. These discrepancies were caused by a software switch from an MRP platform to a SAP platform. This left the company unable to file their financials for two years resulting in the SEC sending a notice threatening to delist the company in August of 2022. IEHC filed all of their financials in May of 2023 and has filed every financial statement since then on time. The company is currently petitioning the SEC for a dismissal of this matter.
All of these events have led to IEHC’s share price falling from upwards of $23.00 per share to just under $6.00 per share. So far the company’s share price has recovered slightly to between $8.50-$9.30 per share as signs of a business recovery in combination with the news of the company catching up with their SEC filings have begun to trickle in.
IEHC’s Operational Performance
During IEHC’s fiscal 2024 the company experienced operating losses of $3.8 million and a $2.9 million net loss. That’s an improvement over a $5.8 million operating loss and a $6.5 million net loss in 2023. So far during the first three quarters of the company’s fiscal 2025, IEHC has actually crossed the line into once again being profitable. They’ve seen a $7.1 million revenue increase, a $3.8 million increase to the company’s operating income, and a $3.9 million increase to the company’s net income thus far YOY. It’s looking like IEHC has finally begun to turn their ship around.
The Company’s Revenue Streams
The biggest portion of IEHC’s revenue’s come from the defense sector which accounts for 65.7% of revenues, followed by the Aerospace sector at 19.1%, the space sector comes in at 11.8%, and then all other revenues come in at just 3.4%. Just over 95% of the company’s revenues have came from domestic sources so far in 2025 with just a little over $1.0 million comings from foreign countries.
These three business sectors that IEHC makes most of their revenues from are going to see a lot of growth in the coming years. IEHC’s revenues are almost 66% defense based and almost entirely domestic but the U.S. sells a lot of their products to other countries. Just this past May the U.S. and Saudi Arabia agreed to a record breaking $142 billion arms deal. While the White House didn’t say what manufacturers would specifically benefit from this deal CEO’s from Lockheed Martin ($LMT), RTX Corp ($RTX), Boeing Co, and Northrop Grumman Corp ($NOC) were reported to be in the country when this deal was announced. This would benefit IEHC a lot as their hyperboloid connectors are used on these missiles and likely the aircrafts being sold to Saudi Arabia. IEHC has a pretty extensive business history with Boeing too.
The Aerospace and Defense industry is expected to grow rapidly for the foreseeable future and according to the Aerospace Industries Association’s 2024 edition of Facts and Figures “In 2023, the U.S. aerospace and defense industry reached an impressive milestone, generating over $955 billion in sales—a 7.1 percent increase from the previous year.” As far as the commercial space industry goes, according to the Space Foundation “the global space economy reached revenues of $570 billion in 2023, reflecting a 7.4% increase over the previous year — in line with a five-year CAGR of 7.3%, and nearly double the total from a decade ago. As of July 2024, commercial revenues account for almost 80% of industry activity.”
IEHC is in a position where it produces products for some of the fastest growing industries in the United States. The company’s biggest revenue earners are in the defense sector. Producers of materials and goods for the defense department have to source (when possible or feasible) their materials domestically. IEHC is the only independent domestic supplier of hyperboloid connectors in the U.S., giving them a moat around that revenue stream. The revenue streams the company is currently trying to expand upon such as medical equipment are also rapidly growing industries that could create value for the company for decades to come.
Conclusion
IEHC has had a very long history of consistent and profitable growth. While the company is family owned it has also been around since the 1940’s and has demonstrated its ability to shift the course of business with changing times. The company has over many decades managed to put itself into a position to supply some of the U.S.’s fastest growing industries all while remaining debt free. While a series of blunders concerning the company’s SAP software roll-out have set the company back as did COVID-19’s travel restrictions, Boeing’s problems with their 737Max, and a shift in military spending, it looks like the company has re-stabilized and is on a path to what will hopefully be years of profitable growth.
In June it’s likely that IEHC will publish its first profitable 10-K in a number of years. I wouldn’t be surprised if the market pushed the company’s share price higher just from that. The real reason to buy into IEHC though is that the company had hit a bad snag but has a clean balance sheet, a low EV, and operates in industries that are growing rapidly. IEHC serves a very important niche within these industries and being the only independent domestic supplier of hyperboloid connectors, the current ramp up in defense spending (the company’s biggest revenue source) should automatically lead to an increase in revenues for IEHC, at least for that particular sector.
Disclosure: I do not currently own shares of the IEH Corporation ($IEHC) but may buy a position anytime after this article is published. This is not investment advice. Do your own research.







Nice! Dan Schum has written up this name before on his nonamestocks blog I have a small position.