SAIC shares could rise more than 30 pct-Barron's
NEW YORK, March 24
NEW YORK, March 24 (Reuters) - Shares of SAIC, a government services provider, could be set for gains, with a planned spinoff expected to help its value despite uncertainty over defense-spending cuts, according to Barron's financial newspaper.
That uncertainty has weighed on shares of contractors and service providers, and the stock, which closed at $12.73 on Friday, is considered cheap, the report in the March 25 edition of the weekly newspaper said.
But in the next 12 months, the company plans to spin off its government information-technology services business, a move that could help unlock its value, by allowing it to bid on government business from which it is currently restriced due to "organizational conflicts of interest," Barron's said.
An analyst who covers the company estimates the stock is worth $17 a share on a sum of its parts basis and could realize that value over the next 18 months, implying a 34 percent gain, the article said.