December 11, 2008 - SAIC, Inc. (SAI-NYSE) provides scientific, engineering, systems integration, and technical services and solutions to various branches of the U.S. military, agencies of the U.S. Department of Defense, the intelligence community, the U.S. Department of Homeland Security, other U.S. Government civil agencies, state and local government agencies, foreign governments, and customers in selected commercial markets.

SAIC's Commercial segment provides various information technology systems integration and technical services, including applications and IT infrastructure management, data life cycle management, and business transformation services to the oil and gas, utilities, life sciences, and other industries worldwide. The company was founded in 1969 and is headquartered in San Diego, California.

The stock went public in late 2006 and has hovered in a rather narrow range of $16.10 to $21.90. But that band may be broken soon, on the upside. In the first half of this year, earnings improved by 20%, thanks to a strong backlog and better profitability. At the end of July, there were orders for $15.9 billion in the pipeline, an increase of 13% over the same period last year. Total sales in 2007 were $8.935 billion. (Fiscal year ends January 31).

Expect good things in the second half as well. New project awards were granted in the third quarter. In fact, as this is written, the company announced a new $160 million contract with the Pentagon. Even with a new president ready to take control, there are no signs that defense spending is slowing or being delayed. There's a possiblity that more government spending to boost the economy will benefit SAIC, if the president decides to use that approach.

Third quarter earnings also were announced recently (Dec. 9). They were 30 cents a share, up from 26 cents a share last year in the same quarter. Analysts expected 29 cents. Next quarter they see 28 cents, up from 25 cents last year. For the full year, look for $1.08, well ahead of the 93 cents last year. Next year, predictions are for $1.22. Part of those earnings will come from cost-cutting programs as well as increased worker productivity.

More numbers: Market Cap is $7.84 billion. Shares outstanding are 404 million with a float of 403.8 million. Institutions own 70% of the stock. Forward P/E is 15. Price to Book is 4.09. Operating margin was 7.5% for the last 12 months, and Profit margin was 4.32%. Total cash is $692 million. Current ratio is 1.65. Book value per share is $4.485. There is no dividend.

Look into SAI if a defensive stock is what you want. Not only is it defensive in the sense that it works with the DOD, but also because it's price volatility has been so low. With a strong backlog and new contracts most likely, this is a stock that should hold up well no matter what the general economy does.

- Company Web site: www.saic.com

- Ted Allrich