SAIC, Inc. (SAIC), is a provider of scientific, engineering, systems integration and technical services and solutions to all branches of the United States military, agencies of the United States Department of Defense, the intelligence community, the United States Department of Homeland Security and other United States Government civil agencies, state and local government agencies, foreign governments and customers in select commercial markets. Its business is focused on solving issues of national and global importance in the areas of defense, intelligence, homeland security, logistics and product support, energy, environment and health. The company operates in three segments: Government, Commercial, and Corporate and Other. In February 2010, the Company acquired Forterra Systems Inc.'s On-Line Interactive Virtual Environment product line. In addition, in February 2010, the Company acquired CloudShield Technologies, Inc.
We subscribe to Goldmacher’s idea that HP should expand into the open source software arena. We think Novell makes a better match than Red Hat and could be had for a very favorable price. Given that Novell is off the table for now, HP will look elsewhere. However, Attachmate is likely to find a way to maximize its value and put itself, along with the integrated Novell, back on the market.
If HP is looking for a government contractor, we think SAIC is the better bet. The company is profitable, has better margins than CACI and a stronger balance sheet. It is not a fast grower but that can change. As SAIC expands to the private sector, earning growth will be greater
Great cannon fodder but HPQ has it's own problems with EDS. Gov is shrinking to post Vietnam acquisition cycle. SAI has lost it's entrepreneur macho. Unfortunately SAI is chasing the same portfolio as it gov peers. Profitable future in that space is very limited.