Based on the aggregated intelligence of 170,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, military contractor L-3 Communications Holdings (NYSE: LLL) has earned a respected four-star ranking.

With that in mind, let's take a closer look at L-3's business and see what CAPS investors are saying about the stock right now.

L-3 facts

Headquarters (Founded)

New York (1997)

Market Cap

$9 billion

Industry

Aerospace and defense

Trailing-12-Month Revenue

$15.66 billion

Management

Chairman/CEO Michael Strianese

CFO Ralph D'Ambrosio

Return on Equity (Average, Past 3 Years)

14.9%

Cash/Debt

$548 million / $4.1 billion

Dividend Yield

2.1%

Competitors

Boeing (NYSE: BA)

Honeywell International (NYSE: HON)

Raytheon (NYSE: RTN)

Sources: Capital IQ (a division of Standard & Poor's) and Motley Fool CAPS.

On CAPS, 96% of the 929 members who have rated L-3 believe the stock will outperform the S&P 500 going forward. These bulls include kenjotto and All-Star TMFDeej, who is ranked in the top 1% of our community.

Just last week, kenjotto applauded the recent news that activist investment firm Relational Investors LLC has become L-3's largest shareholder:

[L-3 Communications] was a well run company with some impressive products and skills in the defense sector. Now it's a well run company with impressive products and skills in the defense sector AND there's a historically successful activist fund pushing to unlock shareholder value. I'm in!

In fact, L-3 currently sports a cheapish price-to-cash flow of 6.8. That represents a clear discount to rivals like Boeing (23.3), Honeywell (14.6), and Lockheed (10.5).

CAPS All-Star TMFDeej elaborates on the opportunity:

To unlock value, Relational is pushing for the sale or spin-off of business units that it believes are dragging down L-3's performance. This may include the sale of the company's low-margin, no growth government-services division and its aircraft-maintenance division.

Divesting these businesses would enable L-3 to focus its resources on growing its high-margin businesses, including such as electronic systems and surveillance / intelligence.

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