Readers of this space know that the investment bias is toward large-cap companies with demonstrated business models and who have a competitive advantage in established markets, preferably with a favorable global trend as a support. But every once in while an exception is made, and with the above in mind, L-3 Communications (NYSE: LLL) is worth a review.

L-3 makes secure and specialized systems for satellite, avionics, and marine communications, with a healthy percentage of its business coming from the U.S. Government.

Analysts like LLL's diversified revenue streams: specialized products (34%) intelligence/communications (22%) government services (25%), and aircraft modernization and maintenance (19%).

Further, analysts expect 7-10% organic revenue growth in 2008, including adequate growth in government service and specialized products revenue. The Reuters FY 2008/FY 2009 EPS consensus estimates for are LLL $6.73 to $7.45.

The risks? Analysts are keeping their eye on LLL's margins, high financial leverage, and ability to increase its low dividend. A substantial decline in U.S. defense spending would also hurt L-3's results.

The First Call mean rating for LLL is: Buy [15 firms]. Mean 2008 target: $122.00 [high: $130, low: $115].

Stock Analysis: L-3 Communications is a moderate-risk stock not suitable for low-risk investors. Investors with an investment horizon longer than 2 years should be rewarded from LLL's shares. Sell / Stop Loss if you to purchase shares in this company: $78.

Disclosure: Lazzaro has no positions in stocks. In addition to private real estate holdings, he owns corporate and municipal bonds, and cash certificates of deposit.