Insider Buying

2iQ Insider Brief: Science Applications International Corporation (SAIC: US)

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Science Applications International Corp (SAIC: US)

12-month performance: +8%
Insider activity: Bullish
Buying pattern: Large purchase from CEO
Recent news: Solid Q4 results

Science Applications International Corporation is a technology company that provides services to the US Government’s Department of Defense. Specialising in technology integration, the group offers solutions relating to IT modernisation, cybersecurity, cloud computing, and data analytics. The company is listed on the New York Stock Exchange and currently has a market capitalisation of $4.6 billion.

SAIC issued a solid set of fourth-quarter and full-year results in late March. For the quarter, revenue was up 29% on the same period last year, boosted by the acquisition of Engility. Meanwhile, Q4 adjusted diluted earnings per share came in at $1.58, above the consensus forecast of $1.34. “SAIC’s full fiscal year 2020 results reflect strong financial performance, operational execution, and the implementation of a strategy that positions the company for sustained, profitable growth and long-term value creation,” said CEO Nazzic Keene. In relation to Covid-19, the company said that its government focus provides business stability and that it has ample liquidity and a strong capital structure to more than adequately service its debt.

saic chart        Source: 2iQ Research

Examining insider transaction activity, we think it’s interesting that Keene purchased $1 million worth of SAIC shares on 3 April. Keene joined Science Applications International Corporation in 2012, and before becoming CEO in 2019, she was the COO of the company. This means that she is likely to have a very good understanding of the group’s prospects. This large purchase – which was her first purchase in years – suggests that the insider is confident about the future and believes the stock is undervalued. We see this large insider purchase as a bullish signal.

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