Annotated article summary from this weekend's Barron's; receive all our Barron's summaries by signing up here:
Defense-Firm Chief Plays Offense by Naureen S. Malik
Summary: L-1 Identity Solutions Inc. (NYSE:ID) CEO Robert LaPenta recently upped his stake in the company he founded, a decidedly bullish signal says Ben Silverman of InsiderScore.com, considering his strong background in the defense and security industry. Shares are down 10% over the past year, but have rallied 12% on news of the CEO's recent purchase. L-1 beat analyst forecasts in its Q4 2006 results earlier this month, and offered positive 2007 guidance. Recently, it lost a Homeland Security contract bid to Lockheed Martin Corp. (NYSE:LMT), which it is contesting. Oppenheimer's William Peters says there is little chance the contract award will be reversed, and rates L-1 a Sell. But Needham & Co.'s James Ricchiuti has it as a Buy, citing a $500 million backlog and LaPenta's leadership. LaPenta has managed to draw some big names to its board, including former CIA director George Tenet, former FBI director Louis Freeh, former assistant secretary of state Robert Gelbard, and Admiral James Loy, a former deputy secretary of Homeland Security. Moreland wonders if the shares might be expensive here, and notes that biometric security may still be a few years in coming. Joshua Hong of OwnershipAnalyzer.com notes that institutions own 40% of shares outstanding, and are giving the company its positive momentum.