Recently I purchased SAIC (SAI) for the Barchart Van Meerten New High portfolio based on very positive price momentum trends SAIC is a scientific, engineering and technology applications company that uses its deep domain knowledge to solve problems of vital importance to the nation and the world, in national security, energy and the environment, critical infrastructure, and health. The company's approximately 40,000 employees serve customers in the Department of Defense, the intelligence community, the U.S. Department of Homeland Security, other U.S. government civil agencies and selected commercial markets.
The company also has accounts with state and local government agencies, foreign governments, and customers in the commercial markets of energy, health care, environmental and cyber security operations.
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The stock is on a tear, hitting 17 new highs and appreciating 5.50% in the last month. The momentum has earned it a 100% Barchart technical buy signal with a Relative Strength Index that is 70.75% and rising. It trades around 16.70 with a 50 day moving average of 15.85. If earnings projection are met and PE ratios improve this stock could give a total return of up to 22% over the next several years.
Wall Street brokerage analysts think this should be a long tern holding with four buy and 12 hold recommendations for their brokers to push. Although sales are expected to increase by only 2.30% this year and 2.80% next year earnings are projected to increase 16.80% this year and continue for five years at an annual rate of 8.48%.
There is a strong investor sentiment as measured on Motley Fool with the CAPS members voting 720 to 43 that the stock will beat the market. The All Stars are in agreement by a vote of 182 to 6.
I feel good about recommending this stock because it has a stock buy back program, several long term royalty agreements and many of the projects in the pipeline are multi-year projects. It has price momentum, with Wall Street recommendations based on expected increases in sales and earnings and positive investor sentiment.
Disclosure: I am long SAI.