Top Five All-Around Value Stocks
08/21/07 - 01:18 PM EDT
TheStreet.com Ratings Staff
L-3 Communications Holdings(LLL Quote - Cramer on LLL - Stock Picks), a military-equipment company, has been rated a buy since July 2005. It recently reported that its second-quarter earnings nearly tripled compared with the same period last year. Higher defense spending worldwide, together with the company's recent acquisitions and a healthy backlog order book, encouraged management to raise guidance for fiscal 2007. L-3 Communications is expected to benefit from increased defense spending, as it is ranked among the top 10 biggest federal contractors. Also, higher security measures adopted by airports throughout the world will create new demand for L-3's baggage-screening systems and surveillance programs. The company's revenue could be impacted by the loss of key contracts in any of its business segments. Also, L-3's dependence on government spending and its strategy of growth through acquisitions could negatively affect the results.
Rated a buy since July 2005, Paccar(PCAR Quote - Cramer on PCAR - Stock Picks) designs, manufactures and distributes light-, medium- and heavy-duty trucks and parts. The company's expansion plans, superior product lines and international focus should preserve its track record of delivering strong financial performance and returns to shareholders. Paccar generated shareholder return of over 35% in the first half of fiscal 2007 thanks to stock price appreciation, share repurchases and dividends. The company has repurchased around $350 million worth of stock over the past 18 months and still has about $279.70 million worth of shares left to be repurchased. This could further enhance its already superior return on equity going forward.
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