Like any stock market loser, when I read the news I'm always looking for any potential ideas that can come from the story's theme. When I read a BusinessWeek article about Homeland Security Secretary Michael Chertoff "promising more cargo screening" my mind immediately thought about the ramifications this move would have on the defense sector. I'm happy that the Homeland Security Secretary is starting to do something after his bold predictions of terrorist activist just a few weeks ago.

In my research I've found a company that should directly benefit from this spending on increased screening -- American Science & Engineering (NASDAQ: ASEI). Surprisingly, the stock didn't move on this news, which makes the situation even better as it seems the connection between American Science & Engineering (AS&E) and the Chertoff announcement flew over most people's heads. I think the reason for this is that AS&E wasn't in any way tied to the article, meaning the article doesn't mention the stock, or any other stock for that matter.

American Science & Engineering isn't a one-trick pony or a poorly developed company. In fact, the company boasts a strong product line, and an undervaluation when compared to its sector.

The company's product line is quite diversified between a wide variety of innovative and useful security technologies. AS&E's SmartCheck screening system basically creates an electronic chalk outline of the person being screened -- any potential weapons, for example, stick out from the body. The TSA has begun pilot testing this technology. The company's Gemini X-ray system is also very interesting. When compared to standard x-ray scanners, the product has been shown to more easily detect metal objects and fine details. Like the SmartCheck, it is easy to see the applicability of the Gemini in today's world. Lastly, and my reason for writing this story, AS&E has a product that provides excellent cargo and vehicle inspection -- the OmniView.

MAJOR PAPERS:

• Thanks to a downturn in sales, sportswear maker Liz Claiborne Inc (NYSE: LIZ) will seek to divest itself of 16 of its 36 apparel brands, equal to about $800 million of its $5 nillion in annual revenue, reported the Wall Street Journal (subscription required)
• The Financial Times (subscription required) reported that Dell Inc (NASDAQ: DELL) has listened to customer concerns and has moved to eliminate "trialware" from a range of small business laptops and desktops computers.

• British mining company Rio Tinto plc (NYSE: RTP) is believed to be preparing a $34 billion, or $90 per share, takeover bid for Canadian aluminum company Alcan Inc (NYSE: AL), reported the U.K. Times.
• According to the Economic Times, FedEx Corporation (NYSE: FDX) has failed in its attempt to buy out Indian logistics company SafeExpress.
• The Chicago Tribune reported that the U.S. faces an "increased risk" of a terror attack this summer, according to U.S. Homeland Security Secretary Michael Chertoff.