L3 Communications: Value Play Or Value Trap? [View article]
However, going back three years, L3 has out performed SPY by 5%, not including the accumulated dividends, which add another few percentage points. So, apparently, L3 is a better long term play.
If you pick and choose your entry/exit points, I'm sure you'll eventually find a good time period to support your original argument. Remember, a good statistician worth his salt, can give you any result you want; given the numbers.
L3 is the 5th largest Defense contractor in the industry. The Department of Defense isn't going anywhere and neither is L3. Plus they just reported an EPS of $2.11. That's up 13% over last year. Revenue is also up 1%. So, even in the face of the challenges in the defense industry, they're still winning contracts.
Key contract wins for the quarter included: (1) a competitively won, five-year contract to provide maintenance and sustainment services for U.S. Army rotary wing aircraft, (2) a contract to build two UH-60M Operational Flight Trainers (OFT) for the Taiwan Army, L-3s first export sale of our rotary wing OFT product line, (3) new business to provide submarine photonic mast and valve systems for an international naval customer, (4) additional international business wins for personnel, baggage and cargo screening systems and an order for eXaminer checked baggage screening systems from the Transportation Security Administration (http://bit.ly/ZKrbiG), and (5) a competitively won contract to provide systems and software sustainment, engineering services support and end-user training for the U.S. Army Reserve.
That being said, the above should give a nice pop to the stock price; providing a possible exit point for holders, to this point. FORWARD looking statements are not so bullish, given the impending impact of the budget cuts.
So, if you entered in the last 2 years, yes, you were on the "WRONG" side. BUT..., if you entered 3+ years ago, you were on the RIGHT side. So, what's your point?
It's all 20/20 hindsight. I guess it depends on where or not you're a long term investor. It's got a Beta of 1.00. For some periods, it's going to beat the market, it certainly won't due much worse. It's a good play for a retirement account; especially if you re-invest the dividends. If you're looking for a short term play, L3 is not it. That pretty much sums it up.
Kind of makes you wonder that, with all of this "upside potential", that the CEO sold $109 million worth of the stock last year (as of 02-01-2013) and another $13.6 Million worth this month. The CEO also sold $15.5 million worth last year (ending 04-01-2013). One would think that they would be buying, instead of selling, right? I mean, considering all of the upside? Could this really be a sell signal?
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Don't forget, they did just make a $35M loan and extended another $20M line of credit to Merus Labs for rights to it's Emselex and Enablex tablets. If that bears fruit, it could pave the way to future growth and revenues (read: more high yielding dividends).
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Is anyone concerned that, with the growing popularity of this sector, that these securities may be getting oversold; even with the secondary offerings?
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I don't understand L3. Dividend yield is 2.7% (above industry average). EPS is expected to increase over the next 5 years. No foreseeable threat to large cash flow generation, due to defense budget austerity and awarded contracts. The stock is undervalued. There's a dip in the price, yet the stock has been on an upward trend since November. Granted, there seems to be some resistance around $74. So, it looks like relatively cheap to me here. Why should I avoid it in the short term?
L-3 Communications (LLL): Q1 EPS of $2.01 beats by $0.16. Revenue of $3.6B (flat Y/Y) beats by $140M. (PR) [View news story]
LLL may not be the most recognizable name outside the arena, but they are a real power house in the Defense Contractor industry; as these numbers show. Also like the way they keep raising that dividend (now at $2.00 per share). With a P/E just under 8 and P/S less than 1.0, this could be a fairly undervalued stock. In fact, at 70, it looks like it could be a nice entry point.
L3 Communications: Value Play Or Value Trap? [View article]
If you pick and choose your entry/exit points, I'm sure you'll eventually find a good time period to support your original argument. Remember, a good statistician worth his salt, can give you any result you want; given the numbers.
L3 is the 5th largest Defense contractor in the industry. The Department of Defense isn't going anywhere and neither is L3. Plus they just reported an EPS of $2.11. That's up 13% over last year. Revenue is also up 1%. So, even in the face of the challenges in the defense industry, they're still winning contracts.
Key contract wins for the quarter included: (1) a competitively won, five-year contract to provide maintenance and sustainment services for U.S. Army rotary wing aircraft, (2) a contract to build two UH-60M Operational Flight Trainers (OFT) for the Taiwan Army, L-3s first export sale of our rotary wing OFT product line, (3) new business to provide submarine photonic mast and valve systems for an international naval customer, (4) additional international business wins for personnel, baggage and cargo screening systems and an order for eXaminer checked baggage screening systems from the Transportation Security Administration (http://bit.ly/ZKrbiG), and (5) a competitively won contract to provide systems and software sustainment, engineering services support and end-user training for the U.S. Army Reserve.
That being said, the above should give a nice pop to the stock price; providing a possible exit point for holders, to this point. FORWARD looking statements are not so bullish, given the impending impact of the budget cuts.
So, if you entered in the last 2 years, yes, you were on the "WRONG" side. BUT..., if you entered 3+ years ago, you were on the RIGHT side. So, what's your point?
It's all 20/20 hindsight. I guess it depends on where or not you're a long term investor. It's got a Beta of 1.00. For some periods, it's going to beat the market, it certainly won't due much worse. It's a good play for a retirement account; especially if you re-invest the dividends. If you're looking for a short term play, L3 is not it. That pretty much sums it up.
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L-3 Communications (LLL): Q1 EPS of $2.01 beats by $0.16. Revenue of $3.6B (flat Y/Y) beats by $140M. (PR) [View news story]