Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, defense company Exelis (NYSE: XLS) has earned a coveted five-star ranking.

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

Exelis facts

   
Headquarters McLean, Va.
Market Cap $1.5 billion
Industry Aerospace and defense
Trailing-12-Month Revenue $6.0 billion
Management CEO David Melcher
CFO Peter Milligan
Trailing-12-Month Operating Margin 10.4%
Cash/Debt $64.0 million / $649.0 million
Dividend Yield 4.8%
Competitors Boeing (NYSE: BA)
General Dynamics (NYSE: GD)
Lockheed Martin (NYSE: LMT)

Sources: S&P Capital IQ and Motley Fool CAPS.

On CAPS, 94% of the 16 members who have rated Exelis believe the stock will outperform the S&P 500 going forward. These bulls include harleytodd and shamapant.

Earlier this week, harleytodd tapped the recent ITT (NYSE: ITT) spinoff as a timely bargain opportunity: "$6B rev with $2B mkt cap = cheap. P/E is 4 vs industry P/E of 20. 4.5% yield. The market regularly undervalues spinoffs for a period of time so buy it now!"

In fact, Exelis' P/E of 4 represents a clear discount to competitors like Boeing (14), General Dynamics (9), and Lockheed (9).

CAPS member shamapant elaborates on bull case:

Classic Undervalued Spinoff situation. Exelis trades at just over 4x earnings, and is hit hard for both being a spin-off and being in an industry with a bad rep, defense cuts. ITT shareholders invested for ITT, not for a spinoff company, let alone a defense company...these shares are undervalued-expect a bounce.

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