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Monday, October 09, 2006

Cramer Endorses SAIC, Before Its IPO

Cramer said that Don Rumsfeld has capitulated and essentially allows the Army to buy whatever it wants now. He is looking for a new defense stock. He is discussing the SAIC IPO that coming out very soon this week under the "SAI" ticker.

He said they are the government-IT that has 89% of its business that comes from our government. He discussed where to buy it. He said SAIC will be the lead systems integrator for the advanced combat systems and also is an IT supplier to NASA.

He said it is expected to come public at $13.00 to $15.00, and he thinks that at $15.00 it is too cheap compared to other defense contractor multiples. Cramer said it is in a league of its own and deserves a 20 P/E like the other defense contractors rather than a 15 P/E. He said you can be a buyer of SAIC up to $20.00 to $22.00.

In a call in he said to stay away from Armor holdings (AH) since it just warned last week.

Jon C. Ogg
October 9, 2006
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