L-3 trades at a 30% discount to the broader defense group. Its stock could rally in the next 12 months, to 100 or so, from today's 76, as demand for the company's expertise grows.

Adami said he liked L3 Comm (LLL) as a Homeland Security play. He said it's a "great" company with a fair valuation.

C4ISR

I wish they would reach for Lilly (LLY), which makes more sense from a growth perspective, but it is J&J that's the fave.

Increased their dividend to 0.35 per share, an increase of 17% payable on March 16, 2009 to shareholders of record at the close of business on February 19, 2009.

Next on the list is L-3 Communications. The New York City-based
aircraft contractor announced a new share repurchase program worth $1
billion in common stock. The new program, which is effective
immediately, is L-3's third buyback plan and will expire in 2 years.
The company added, the repurchases will be finance from cash on hand
and cash from operations and will be made from time to time at
management's discretion.

"We are very pleased to continue our commitment to delivering value to
our shareholders through this new repurchase authorization. Returning
cash to our shareholders is a key element of our disciplined capital
deployment strategy," said Michael T. Strianese, chairman, president
and CEO. "This new authorization underscores our confidence in L-3's
strong fundamental business position, our growth and earnings prospects
and our ability to continue to generate strong cash flows for 2009 and
beyond."

L-3 recently entered into an agreement to buy Chesapeake Sciences
Corporation. CSC develops anti-submarine warfare systems. Their high-
tech products include sonar arrays for use in onboard submarines and
surface ship combatants. CSC is expected to generate $70 million in
sales during 2009.

After Cowen and Company attended L-3's annual Investor Day conference,
they issued a bullish note on L-3. Cowen has a outperform rating on
this "low-risk defense play." Analyst Cai von Rumohr explains, "L-3's
platform-agnostic sales mix, low pension risk, and coherent plan for
10% plus EPS growth make it an attractive relative safe haven for the
Administration changeover." With a peer high 14% plus cash flow yield,
LLL is Rumohr's favorite defense play.

It's also good to see that HREF="http://www.stockpickr.com/port/Pzena-Investment-Management-
LLC/"target="blank">Pzena Investment Management believes that L-3
will take off. This $16 billion-dollar firm is a classis value
investment manager that bases their investments on one overriding
question: are the problems that currently cause a stock to be cheap
temporary or permanent? Their other top holdings are Bank of
America and Microsoft.

Another superstar firm that holds LLL in their portfolio is HREF="http://www.stockpickr.com/port/Navellier-amp-
Associates/"target="blank">Navellier & Associates. Navellier is a
$3.8 billion fund run by Louis Navellier who has been dedicated to
finding and exploiting inefficiencies in the stock market since 1980.
Navellier's disciplined process is designed to identify stocks that
should contribute significantly to overall portfolio outperformance
against relative benchmarks. His other top holdings are Potash
Corp and Lockheed Martin.

So we have a buyback, a recent acquisition, a bullish report with an
outperform rating, and two hugely successful investment company buying
shares. It might be time to add L-3 to your portfolio.

Great company

Military contractor L-3 Communications (LLL) joined the portfolio because of its 1.5% yield and dividend CAGR of 34%, and Harris (HRS), a communications and information-technology outfit, was bought because of its 2.5% yield and five-year dividend CAGR of 31%.

L-3 Communication (LLL) is trading at a 52-week low, says Guy Adami. I think it’s a well run company that didn’t deserve the recent downgrades.

The volume of call buying in this stock suggests to me that it could soon bounce higher, says Najarian.