When legendary conglomerate ITT split into three enterprises last year, Exhibit A in the case activist investors made for the break-up was the way they said defense operations were depressing the share price. I don’t know whether becoming independent has “unlocked the value” of the commercial units, but ITT’s defense spinoff is looking poised to outperform many of its peers in the federal space. Called Exelis (ticker symbol XLS), the new company is very well positioned to supply needs the joint force will have in coming years for digital radios, advanced sensors, electronic countermeasures, space-based navigation and cyber security. It also is successfully diversifying into non-military adjacencies such as air-traffic control, composite aerostructures and environmental monitoring. With a strong management team and technology skills that are truly world-class, Exelis probably is better off free from its former parent. I have written a commentary for Forbes here.
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