L-3 Communications Holdings, Inc. (NYSE:LLL)

CAPS Rating: 4 out of 5

The Company is a prime system contractor in aircraft modernization and maintenance, Command, Control, Communications, Intelligence, Surveillance and Reconnaissance systems and government services. Also supplies high technology products and systems.

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Player Avatar morowulf (50.30) Submitted: 12/26/2011 4:19:29 PM : Outperform Start Price: $66.50 LLL Score: -3.66

Based upon historical earnings, I think this stock should be valued near $105.59 using discounted cash flows over the next 5 years. This produces a safety margin of 36%. Besides the earnings growth indicating the stock is under valued, this stock is due to have a spin-off next year which I believe will produce more value for shareholders. The only downside that I see is the pending defense cuts over the next year or so, but I believe this is a good long-term investment.

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