Tuesday, August 29, 2006


According to the WSJ's "Heard on the Street", despite the appearance of turmoil, it may be time to think about buying shares of L-3 Comm. (LLL). Despite the recent corporate shocks, the co looks set to expand faster than its defense counterparts, giving bulls reason to bet that the stock has plenty of room to rise. Always quirky b/c of its eclectic portfolio of defense and homeland-security products and its frenetic acquisition strategy, L-3 has become a highly speculative play. Frank Lanza, the co's Chmn and CEO, died in June 6. The day his death was announced, L-3's stock jumped nearly 5%, on conjecture that the co would become an acquisition tgt. The conventional wisdom was that, deprived of the founder's vision, L-3 would have to be sold intact or parceled off. Mgmt sought to quell such rumors, saying L-3 has enough critical mass and growth potential to go it alone. No sale appears to be in the offing, but that hasn't damped some investors' enthusiasm. "The stock is significantly undervalued right now," says Matthew Halbower, of Deephaven Capital Mgmt, hedge-fund firm with about $3bn in assets that is a significant institutional investor in L-3. "One thing that has kept the stock languishing is the lack of a full-time leader and the perceived lack of strategic direction. We expect that to get resolved in Sep." George Shapiro of Citigroup sees the stock at $93.

Barron's Online reprots that since the beginning od August, the head of Ameristar Casinos (ASCA) has laid down $2.9m for shares of the casino operator. Craig H. Neilsen, CEO and Chmn of Ameristar, purchased 150K shares in three separate purchases. Neilsen's purchase was also his first purchase of Ameristar stock on the open mkt since the co went public in '93. This level of insider ownership, particularly by a CEO, "is always a good thing," says Ben Silverman, director of research at InsiderScore.com. "You can almost look at it as a historically family-owned business."

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