24/7 Wall St.

Before reading some non-stock and non-equity information, there of course is some stock-related data for you at the end of this article.

After doing some routine outlying web searches this morning I saw a "new" video located on Yahoo! Finance that w as run by Fox Business News online called "Wal-Mart Helping Terrorist? WMT" and I knew this was going to get some attention (even if it is yesterday’s news).  It also feels like re-sensationalizing the flip side of something sensationalized over and over, but that’s another story.  This was also something that was picked up yesterday by CNN and you can check that too. 

The video discusses the activist group "Wake Up Wal-Mart," and you can verify all of this for yourself on the activist website, running television ads this week in 16 major cities titled "America’s risk."  The ads are using terrorism scare as an attack against Wal-Mart and its opposition of scanning inbound cargo containers at US ports.  The ad shows an image of a nuclear explosion (not a nukular one), an image of Osama bin Laden, and footage of terrorist camps.  You can see the video. 

Screening every single cargo container is probably a very costly proposition and if you have ever seen how government regulation of something to this tune is implemented you will know it is great in theory and will probably fall far short in reality.  I am personally for cargo containers being screened, but I am also aware of the fact that this is above and beyond a major feat and regardless of what the regulations mandate there is a precedent of the results falling one-hundred miles short of the goals.

Wal-Mart is probably going to be for anything that speeds up deliveries and at the cheapest cost possible.  Screening ‘every’ cargo container will definitely slow things down and increase transportation costs.  But, trying to use terrorism photos and video footage and showing a nuclear bomb and terrorist camps in an ad campaign against even a company like Wal-Mart?  I have been very vocal against Wal-Mart myself because of its stock performance, and I have noted that Lee Scott could actually reward his shareholders if he left the company.  But this sort of attack looks like it goes too far. 

There is a stock angle to this of course.  BUT….Keep in mind that this is not a New investable trend in global port security and homeland security.  In fact, this has been an investable event since 2004 and ever farther back than that.  These are some of the stocks that might get attention if the interest in this is re-kindled (yes, it has been around before):

L-3 (LLL-NYSE) is a diversified defense player, but they have shipping cargo scanning abilities.  Varian Medical Systems (VAR-NYSE) is mostly known for its medical products, but it has a cargo screening technology that scans cargo for weapons and other contraband.  OSI Systems (OSIS-NASDAQ), via its Rapiscan unit allows cargo screening.  It needs to be pointed out that Rapiscan is mainly in Trucking cargo per its descriptions, but you can imagine the retooling that it could do for rail and/or shipping cargo containers.  There may be others in the field, and there are likely a whole host of OTC or foreign companies that have ambitions and claims in the field.  These are just some of the more established companies that could still see a boost to their business and that have enough other operations that ‘may’ offer a little more stability.

I didn’t think I would be coming to the defense of a company that I feel is so far out of alignment with its shareholders and out of alignment with its customers, but sometimes you see something that has gone too far.

Jon C. Ogg
March 23, 2007

Jon Ogg can be reached at jonogg@247wallst.com; he does not own securities in the companies he covers.