LLL Investment Analysis Report & Stock Research, L-3 Communications Holdings Inc

L-3 Communications Holdings Inc (LLL)

LLL Stock Report

2-Year Price History

View Larger LLL Chart
NYSE:LLL
$76.72
(10/9 4:00PM)
+0.6%
Open$76.5 Mkt Cap$8.9 Billion
High$77.015 52Wk High$83.19
Low$75.87 52Wk Low$57.12
Volume1.0 Million Avg Vol 10D1.2 Million

Ockham's Rating/Recommendation Summary

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LLL Revenue

For a long time, value investors have used the current share price relative to sales per share levels as an important valuation tool. We utilize a historical weighted average methodology that treats recent years more importantly in the calculation. When looking at LLL through this framework, we can see that our weighted average historical high and low Price to Sales per share ratios over the last 10 years are 1.20x and 0.79x respectively.

Utilizing this range we can see that LLL’s current Price to Sales per share ratio of 0.58x is significantly below its average levels historically. In fact, with a current price of $76.25, LLL is a full 42% below its average Price to Sales ratio at comparable sales levels. This is a rare occurrence and, when taken in context of the other areas of our analysis, can be a strong positive for our outlook for LLL.

LLL Cash Earnings

As the old saying goes, "Cash is King!" We look at reported Cash Earnings, but the main emphasis of our analysis involves stripping out non-cash events such as depreciation from our cash earnings analysis. This helps us view the cash flows more clearly. Nevertheless, an analysis of Cash Earnings (both reported and otherwise) is absolutely pivotal to assessing a company's value, and currently LLL is significantly below its historical average multiple of cash earnings as calculated by Ockham. Similar to our analysis of sales per share, Ockham looks at the last 10 years of cash earnings levels for LLL to identify where the current high and low price levels have been historically in relation to profit per share. Again, we utilize a weighted average methodology which relies more heavily on recent years of data. This weighted average framework provides us with an average high Price to Cash Earnings ratio per share of 16.59 and a 11.00 low over the same period.

Now that LLL’s current price is $76.25 and its Price to Cash Earnings ratio is 7.74, we are very positive on its outlook from the cash earnings perspective. In fact, LLL is now trading a full 44% below its average historical Price to Cash Earnings ratio at these profit per share levels. When our clients ask us why LLL has great long term potential, the Cash Earnings levels to current stock is one of our primary reasons. But naturally, now we need for the overall market to recognize this disparity.

LLL Dividends

While it is not necessary to pay an attractive dividend or a dividend at all, to receive a positive rating from Ockham, we view dividends as an additionally helpful measure in determining the future potential of any company.

In LLL’s case, the estimated annual dividend is $1.40 resulting in a current dividend yield of 1.84%. Similar to our review of Sales and Cash Earnings per share, we evaluate dividend yields from LLL against the historic high and low levels over the past 10 years. The highest dividend yield from LLL over this period was 2.45% while the lowest dividend yield was 0.00% If you are looking for some “bang for your buck” then a dividend yield of 50.20% above the historical median should be enticing. LLL receives a positive boost in our view because as you know, equity at its core is simply a claim on future dividends.

Peer Comparison

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L-3 Communications Holdings Inc Industry Grouping

(10/8/2009)
Company Ticker Market Cap (Ml) Latest
Price
Price/Cash Earnings Price/Sales 5-Yr. Rev.
Growth Rate
5-Yr.
Avg. ROE.
Current 10-Yr. Range* Current 10-Yr. Range*
Peer Company Averages (not incuding LLL) 10.77 3.77 » 21.75 1.43 0.33 » 2.72 18.94% 25.11%
*10 year range does not include current year values
L-3 Communications Holdings Inc LLL $8.9 Billion $76.25 7.74 5.80 » 19.15 0.58 0.46 » 1.64 24.10% 11.96%
Rockwell Collins, Inc. COL $8.0 Billion $50.50 10.20 5.59 » 18.45 1.75 0.77 » 2.80 13.41% 38.76%
Goodrich Corp. GR $6.6 Billion $53.31 7.02 3.31 » 18.64 0.96 0.33 » 1.47 10.01% 21.04%
Embraer Empresa Brasileira de Aeronautica SA ERJ $4.2 Billion $23.23 14.34 4.53 » 32.56 0.71 0.24 » 2.95 24.20% 18.96%
FLIR Systems, Inc. FLIR $4.2 Billion $27.62 15.34 2.08 » 30.59 3.71 0.32 » 6.39 28.12% 23.78%
SAIC, Inc. SAI $3.9 Billion $18.68 6.92 3.36 » 8.51 0.00 0.00 » 0.00 n/a 23.00%

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The Latest Financial News
2:28:43 PM LLL $76.34 L-3 Communications Holdings Inc
9/4/2009 2:28 PM
“…C, BAC, and Morgan Stanley (MS) have all been recently upgraded by Egan-Jones.Defense/Aerospace – Some time ago, we commented favorably on L-3 COMMUNICATIONS Holdings, Inc. (LLL), including an admonition to our readers not to confuse LLL with Level 3 Communications Inc. (LVLT) because the gap in credit quality between the similarly-named entities has widened significantly. LLL is the sixth largest defense contractor, a solidly …” - LLL on Zero Hedge
5:50:25 PM LLL $74.28 L-3 Communications Holdings Inc
8/28/2009 5:50 PM
“…Acceptance Corp. (+28.42bps), and MGM Mirage Inc (+24.51bps) in the wideners, and Royal Caribbean Cruises Ltd (-27.83bps), Centex Corp (-20bps), and L-3 COMMUNICATIONS Corp. (-19.79bps) in the tighteners.In the names of the HY index, this week's biggest percentage movers were Fairfax Financial Holdings Limited (+36.66%), Iron Mountain Incorporated (+22.26%), and Limited Brands, Inc. (+8.46%) in the wideners, and Eastman Kodak Co. (-22.21%), …” - LLL on Zero Hedge
5:51:36 PM LLL $73.47 L-3 Communications Holdings Inc
6/3/2009 5:51 PM
“…Like, very well positioned at the nsa. And, you know, we definitely like sai. >> it all falls under homeland security, frankly, and triple L 3 COMMUNICATIONS is another one you want to look at here. >> time for fast and furious your answers to tomorrow's big market questions right now. Retailers releasing their may sales figures tomorrow morning. Dominating early trading. …” - LLL on Fast Money
6:07:59 PM LLL $76.15 L-3 Communications Holdings Inc
4/30/2009 6:07 PM
“…Large backlog of orders. Is this the time to load up the truck on i.D.? >> first of all, you know -- you know they think bob was one of the original ls from lll is a terrific businessman, okay in and that matters tremendously. Second, there's a lot of worth here, but i've said over and over again, until I see a definitive move in earnings, …” - LLL on Mad Money
5:30:34 PM LLL $78.80 L-3 Communications Holdings Inc
2/6/2009 5:30 PM
“…The big-ticket items might get slashed, lockheed might get but you know what's going to get spent, homeland security. Got to go to lll, L-3 COMMUNICATIONS. Look at the quarter they put up. They sweet guided through. I think serp bagging sand, that means sandbagging. Great funded backlog, great-run company. Look at lll going forward. >> you know, gandhi di was actually extremely hawkish and oddly enough not related to >> that came out of left field. Wasn't expecting that. …” - LLL on Fast Money
5:57:00 PM LLL $78.53 L-3 Communications Holdings Inc
2/4/2009 5:57 PM
“…We are going to be weak I like aprilol the weakness. >> beautiful stuff. What have you got? >> defense spending. Continues to rise. Like my blood pressure. L-3 COMMUNICATIONS. >> you don't like being between me and jeff. >> go ahead, karen. >> I like treasury inflation. >> gdx. …” - LLL on Fast Money
5:56:58 PM LLL $79.38 L-3 Communications Holdings Inc
1/22/2009 5:56 PM
“…Quick clarification from last night. They did not access the tarp. They have a variety of other government facilities. Final trade, mr. Mackey? >> microsoft. >> what have you got? Lll. >> iii after the bell. >> dxl. Oil and jause. >> beth goldman, director of publicity for the show, congratulations on the birth of your child today. …” - LLL on Fast Money
View All L-3 Communications Holdings Inc News

Key Fundamentals

LLL - L-3 Communications Holdings Inc Fundamentals
Price (10/9 4:00PM) $76.72
Volume (10/9 4:00PM) 1.0 Million
Last Close Price $76.25
10 Day Average Volume 1.2 Million
13 Week Price Range $64.79 - $82.65
52 Week Price Range $57.12 - $83.19
LTM Revenue $15.2 Billion
 
Shares Outstanding (12/2008) 116.6 Million
Market Capitalization $8.9 Billion
Shares Held By Institutions 97.6 Million
Institutional Holders 762
% Shares Held By Institutions 83.70%
Earnings Per Share (EPS) $7.56
P/E Ratio 10.40
Book Value Per Share $52.42
 
Gross Margin 12.30%
Annual Dividend 1.40
Dividend Yield 1.80%
Beta 0.83
Fiscal Year Ends December

About L-3 Communications Holdings Inc

L-3 Communications Holdings Inc is considered to operate in the Industrial Goods sector. They specifically operate in the Aerospace - Defense- Products/Services business segment contained within the Aerospace/Defense industry.

The Company is a system contractor in aircraft modernization and maintenance, Command, Control, Communications, Intelligence, Surveillance and Reconnaissance systems, and government services. It also provides technology products, subsystems and systems.