Dear Mr. Berko: I heard about this company called L-3 Communications that will be selling thousands of devices called ProVision scanners. This scanner takes an X-ray of your body at an airport or baseball game and the viewer can immediately tell if you are carrying a gun, knife or explosives. It only takes seconds, which certainly beats the long lines and pat-downs at the airport. What do you know about this company? Do you think this device will be successful? I know the L-3 stock sells for more than $100 a share and I would buy 75 shares if you say so? — H.D., Lady Lake, Fla.

Dear H.D.: In late 1997, when two of the worlds' largest merchants of death, Loral Corp. and Lockheed-Martin, merged their killing resources, they sold their less lethal assets to a small company called L-3 Communications Holdings Inc. (LLL-$103). So LLL became the supplier of choice for optics, avionics, microwave components, secure communications systems, telemetry and other less lethal hardware to most of the nation's defense contractors. In mid-1998, Lehman Bros. took LLL public with a 6 million-share initial pubic offering at $22. After a 2-for-1 split in 2002, the stock traded between $45 and $103 a share.

Since its genesis in 1998, LLL's revenues surged from $1.1 billion to nearly $15 billion, net income exploded to almost $1 billion on profit margins that doubled in the past decade. General Dynamics, Northrup Grumman Corp., The Boeing Co., Lockheed Martin Corp., Rockwell International and Raytheon Co. build rockets, aircraft, bombs, missiles and the big guns that deliver death while, LLL designs, produces and sells the systems to make certain the delivery of those aircraft, bombs and rockets are on target. It's a marvelously symbiotic relationship, which is basically the yin and yang of it.

Killing people, destroying homes, bridges, schools and infrastructure is a wonderfully profitable business and hundreds of billions of dollars are spent each year in pursuit of this noble global goal. So very time a bomb blows or a missile strikes, a chopper crashes or a communications system fails, L-3 is Johnny on the spot with a replacement and the Pentagon doesn't ask for competitive bids. In fact, L-3's products are perfectly embedded with the Pentagon's platform-centric investing.

Management has ingeniously placed systems and sensors on myriad platforms without overexposure to any one ship, plane or vehicle. L-3 seems to be able to stay ahead of the pack with well placed lobbyists in Congress and the Pentagon to position itself in advance of changes and demand. Over the years as the defense industry transforms itself, L-3 always seems to be at the forefront.

However, I believe ProVison scanners, which will sell for $150,000 each, might not be as acceptable as you think. The machine, which is shaped like and a little larger than an old-fashioned telephone booth, might be much too revealing for the public's taste. It's kind of an electronic strip-search that bounces radio frequency signals off your body to form a life-size, onscreen image that is viewed by Transportation Security Administration gawks in another room.

The image is explicit, revealing medical details like colostomy bags and implants and gives the viewer a precise image of private body parts ... if you get my drift. I think this is an invasion of privacy and I would not be surprised if some entrepreneurial TSA folks might try to sell images of various celebrities and/or folks with odd body shapes to the media.

LLL believes their ProVision scanners will be used at sports arenas, theme parks, state and federal building, museums, conventions, theatres, restaurants, schools and other venues where crowds gather to view an event. I'm uncomfortable with this device, but it might be a necessary evil because our government ties itself into politically correct knots to avoid profiling some people whose dress, persona and behaviors warrant observation.

While the ProVision contraption could generate good sales, LLL's arsenal of more sophisticated products will do a better job of moving revenues and profits into the future. Most analysts have an "outperform" rating on LLL and the shares are found in more than 600 mutual fund portfolios.

As long as there are battles to be fought, cities to be destroyed and people to be killed, LLL will provide the delivery systems to do it. In the process, LLL will be making billions of dollars. So hitch a ride, become an LLL shareholder and you might be able to put some nice profits into your bank account.

Please address your financial questions to Malcolm Berko, P.O. Box 1416, Boca Raton, FL 33429 or e-mail him at [email protected]. To find out more about Malcolm Berko and read features by other Creators Syndicate writers and cartoonists, visit the Creators Syndicate website at www.creators.com.

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