4-Star Stocks Poised to Pop: L-3 Communications

Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, military contractor L-3 Communications Holdings (NYS: LLL) has earned a respected four-star ranking.

With that in mind, let's take a closer look at L-3's business and see what CAPS investors are saying about the stock right now.

L-3 facts

Headquarters (Founded)

New York (1997)

Market Cap

$7 billion


Aerospace and defense

Trailing-12-Month Revenue

$15.4 billion


Chairman/CEO Michael Strianese
CFO Ralph D'Ambrosio

Return on Equity (Average, Past 3 Years)



$538 million / $4.1 billion

Dividend Yield



Honeywell International
Lockheed Martin

Sources: S&P Capital IQ and Motley Fool CAPS.

On CAPS, 96% of the 948 members who have rated L-3 believe the stock will outperform the S&P 500 going forward.

Just last month, one of those bulls, morowulf, highlighted L-3 as a solid bargain opportunity:

Based upon historical earnings, I think this stock should be valued near $105.59 using discounted cash flows over the next 5 years. ... Besides the earnings growth indicating the stock is undervalued, this stock is due to have a spin-off [in 2012] 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.

What do you think about L-3, or any other stock for that matter? If you want to retire rich, you need to put together the best portfolio you can. Owning exceptional stocks is a surefire way to secure your financial future, and on Motley Fool CAPS, thousands of investors are working every day to find them. CAPS is 100% free, so get started!

Want to see how well (or not so well) the stocks in this series are performing? Follow the newTrackPoisedToCAPS account.

At the time thisarticle was published Fool contributor Brian Pacampara owns no position in any of the companies mentioned. The Fool owns shares of L-3 and Lockheed. Motley Fool newsletter services have recommended buying shares of L-3. Try any of our Foolish newsletter services free for 30 days.We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Fool's disclosure policy always gets a perfect score.

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