As is the case in the corporate world, government agencies have "go to" consultants. So far as the U.S. defense community is concerned, there is an outfit in San Diego that is on the list.

SAIC, Inc. (NYSE: SAI) provides scientific, engineering, systems integration and technical services to all branches of the U.S. military, agencies of the Department of Defense, the intelligence community, the U.S. Department of Homeland Security and other U.S. Government civil agencies. The firm also offers technology-driven consulting services to the oil & gas, utility and pharmaceutical industries. SAIC employs more than 44,000 people, in over 150 cities worldwide. Lockheed Martin (NYSE: LMT) is a major competitor.

The firm pleased investors last week, when it reported Q2 EPS of 24 cents and revenues of $2.2 billion. Street analysts had been looking for 21 cents and $2.17 billion. Management also guided FY08 EPS to 83-88 cents (85 cent consensus) and FY08 revenues to $8.7-$9.0 billion ($8.79B consensus).

MOST NOTEWORTHY: Popular (BPOP), MRU Holdings (UNCL), CDC Corp (CHINA) and Oscient Pharmaceuticals (OSCI) were today's noteworthy initiations:

• Kaufman initiated Popular (NASDAQ: BPOP) with a Hold rating and $13 target, citing the company's direct exposure to nearly $2B of Alt A residential mortgage loans originated by its U.S. operations and approximately $250M of exposure to another $4B of collateralized, securitized mortgage pools.

• MRU Holdings (NADSAQ: UNCL) was initiated with a Buy rating and $8.50 target at Roth Capital. Roth Capital believes MRU Holdings is on the threshold of potentially explosive growth in the fast growing segment of the education lending market, that of private loans.

• JMP Securities said CDC Corp. (NASDAQ: CHINA) , with its resources and connections in China, has excellent deal flow and has been a disciplined, value oriented buyer, and started shares with a Market Outperform and $10.50 target.

• Piper believes Oscient Pharmaceuticals (NASDAQ: OSCI) experienced management team and PCP sales force are competitive advantages and will lead to attractive partners. Piper initiated Oscient Pharmaceuticals with an Outperform rating and $5 target...

OTHER INITIATIONS:

• Raymond James started SAIC (NYSE: SAI) with a Market Perform rating.

• Morgan Keegan initiated Hilltop Holdings (NYSE: HTH) with an Outperform rating.

• Dice Holdings (NYSE: DHX) was initiated with an Overweight rating and $15 target at Morgan Stanley.

• RBC Capital initiated VMware (NYSE: VMW) with a Sector Perform rating and $75 target.

Analyst summaries provided by TheFlyOnTheWall.com (subscription required).

MOST NOTEWORTHY: Kenexa Corp (KNXA), CACI International (CAI), SI International (SINT), Tyco Electronics (TEL) and YUM! Brands (YUM) were today's noteworthy initiations:

• ThinkEquity started Kenexa Corp (NASDAQ: KNXA) with an Accumulate rating, citing the company's attractive business model that can deliver high-value, high-margin content, but questions the company's plans to compete with best-of-breed vendors.

• Banc of America initiated CACI International (NYSE: CAI) with a Neutral, citing the challenging budget environment and margin trends.

• Banc of America believes shares of SI International (NASDAQ: SINT) offers a compelling risk/reward given the improving civilian funding environment and upside potential from recent M&A activity, and assumed coverage with a Buy rating and $38 target.

• Tyco Electronics (NYSE: TEL) was started with a Hold rating at Deutsche Bank, citing risks to the company's potential turnaround.

• Yum! Brands (NYSE: YUM) was re-initiated with an Outperform rating at Friedman Billings on valuation and considers any stock price weakness from the increased costs as a buy opportunity.

OTHER INITIATIONS:

• Banc of America assumed the following Government IT Services companies with Buy ratings: SRA International (NYSE: SRX) and SI International.

• Banc of America assumed the following Government IT Services companies with Neutral ratings: CACI International, MTC Technologies (NASDAQ: MTCT), SAIC (NYSE: SAI), and ManTech International Corp (NASDAQ: MANT).

Analyst summaries provided by TheFlyOnTheWall.com (subscription required).

Inferential Focus, Inc. was the subject of Barron's interview this past weekend. This research driven company combs the world looking for new investment trends.

One emerging trend that could prove profitable for investors is the Department of Defense's need for a new generation of military satellites and communications networks in general. Technology exists, and could easily get into the hands of potential enemies, that can jam communications between U.S. spacecraft and ground stations by messing up the current DOD satellites that serve as central communications point for all these devices. A simple ground station based in any country could potentially mess up the communications of our military.

To solve this potential problem, the DOD has embarked on a $34 billion project to build a whole new global networking system similar to the Internet called GIG, or Global Information Grid. The DOD's goal is to make this network the most secure communications network ever to exist.

The companies that are going to benefit from this build-out are Globecomm Systems Inc (NASDAQ: GCOM), SAIC Inc (NYSE: SAI) and Radvision Ltd (NASDAQ: RVSN). My knowledge about these companies is severely lacking. Please send in comments if you know anything about this satellite build-out or these companies.

MOST NOTEWORTHY: CACI International Inc (CAI), SAIC, Inc (SAI), CenturyTel, Inc (CTL), Honda Motor Co (HMC) and Micron Technology, Inc (MU) were today's noteworthy downgrades:

• Morgan Stanley downgraded CACI International (NYSE: CAI) and SAIC Inc (NYSE: SAI) to Underweight from Equal Weight to reflect concerns over an increasingly unfavorable political environment as the risk of reduced funding for federal IT initiatives grows.

• Soleil downgraded shares of CenturyTel (NYSE: CTL) to Sell from Hold on valuation and a possibly active hurricane season.

• Honda Motor Co (NYSE: HMC) was cut to Neutral from Buy at Merrill Lynch.

• Micron Technology (NYSE: MU) was downgraded to Sell from Neutral at Goldman Sachs as the firm believes improvements in DRAM pricing will be short lived and that the company will continue to generate losses given its poor cost structure.

OTHER DOWNGRADES:

• CSX Corp (NYSE: CSX) was downgraded to Reduce from Neutral at Calyon on valuation and deteriorating volume.

• Rockwell Automation (NYSE: ROK) was cut to Neutral from Overweight at JP Morgan.

• Inverness Medical Innovations, Inc (AMEX: IMA) was downgraded to Hold from Buy at Stifel.

• WebSideStory, Inc (NASDAQ: WSSI) was downgraded to Sector Perform from Outperform at RBC, citing short-term execution risks.

• Jefferies downgraded Cerner Corp (NASDAQ: CERN) to Hold from Buy.

Analyst summaries provided by TheFlyOnTheWall.com (subscription required).

MOST NOTEWORTHY: Marvel Entertainment (MVL) and SAIC (SAI) topped today's extensive list of initiations.

• RBC Capital Markets initiated Marvel Entertainment, Inc. (NYSE:MVL) with a Sector Perform rating and $30 target; the firm said Marvel may have already exploited what it can out of previous titles and that future film slates of licensed characters are not guaranteed to have the same appeal as "Spider Man" or "X-Men."
• SAIC, Inc. (NYSE:SAI) was initiated at a multitude of firms today: Stifel Nicolaus, Jefferies, Citigroup and KeyBanc McDonald started SAIC with a Hold rating; Morgan Stanley and Stephens started the defense company with an Equal Weight rating; Bank of America and Cowen initiated SAIC with a Neutral rating; Bear Stearns initiated them with a Peer Perform rating. Mostly all cited valuation.

OTHER INITIATIONS:

• Needham started Evergreen Solar, Inc. (NASDAQ:ESLR) with a Buy rating and $12 target, citing expectations of the solar power manufacturer to grow at 2x the overall PV industry, resulting in market share gains.

Analyst summaries provided by TheFlyOnTheWall.com (subscription required).

No doubt, SAIC Inc. (NYSE: SAI) had a stunning IPO last week. The stock increased from $15 to $18.18 per share and traded about 50 million shares.

Founded 37 years ago, SAIC helps governments solve tough problems such as building technologies for unmanned planes or designing new battlefield networks.

In fact, governments outsource billions of dollars in research projects to SAIC. So, what are some of the things the company is working on?

Well, you can find out from the company's IPO filing:

Advanced Robotics. These are individual robots as well as unmanned vehicles. For example, an unmanned vehicle uses geospatial intelligence to basically get to where it needs to go (and, yes, defeat our enemies). One application: "these robots may be used to search and map terrorist-occupied or earthquake-damaged buildings, as well as track intruders."

Wireless Sensors. These are very small wireless sensors called Smart Dust. They basically self-configure according to changes in the environment. Application: "help the U.S. military improve situational awareness, reconnaissance, surveillance and target acquisition capabilities in urban areas."

Biopharmaceutical and Medical Research. SAIC is developing nanotechnology technologies to treat cancer, as well as come up with vaccines for HIV, anthrax and malaria. The goal is to establish a huge database called the Biomedical Informatics Grid, which will allow research among 600 experts from over 50 cancer centers.

Tom Taulli is the author of various books, including the Complete M&A Handbook and operates InvestorOffering.com.

The long-awaited IPO of SAIC Inc. has finally made it to market. SAIC priced 75 million shares at $15.00, at the top of the $13.00 to $15.00 range. It will trade on NYSE under the "SAI" ticker.

It has now listed Morgan Stanley and Bear Stearns as the joint book-runners; co-managers are listed as Citigroup, Wachovia, Banc of America, Cowen & Co, Jefferies, and Stifel Nicklaus.

SAIC is one of the leading large private defense contractors with a focus on technology and IT operations. 89% of its revenues come from various departments inside the U.S., and most of that is pertaining to armed forces contracts.

This IPO has literally taken years to come to fruition because of employee voting requirements and because of multiple share classes that had to be consolidated. There was also one last pre-IPO dividend paid out, so the last balance sheet may be a little lighter on the cash at current date.

If you will recall, Cramer just touted this IPO early this week before the deal was even priced, and he said anything up to $20 is in-line with other defense contractors.

There is also a financial and backgrounder piece here if you wish to review, but this is a name that defense oriented investment managers almost have to have some exposure to in their investment portfolios.

Jon Ogg is a partner in 24/7 Wall St., LLC; he does not own securities in the companies he covers.

Cramer said that Don Rumsfeld has capitulated and essentially allows the Army to buy whatever it wants now. In his search for a new defense stock, Cramer was discussing the upcoming SAIC IPO, which is to debut this week under the "SAI" ticker.

SAIC, Cramer said, is the government-IT and has 89% of its business from our government. It will be the lead systems integrator for the advanced combat systems and also is an IT supplier to NASA.

Cramer then discussed where to buy it. He said SAIC is expected to come public at $13.00 to $15.00, and he thinks that even at $15.00 it is still too cheap compared to other defense contractor multiples. According to Cramer, SAIC 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 investors should be buyers of SAIC up to $20.00 to $22.00.

As for another defense contractor, Cramer said he'd stay away from Armor Holdings Inc. (NYSE: AH) after its warning last week.

Jon Ogg is a partner in 24.7 Wall St, LLC; he does not own securities in the companies he covers.

SAIC has made the necessary approvals and set terms for its IPO. It will trade under the ticker 'SAI' on the New York Stock Exchange and it has completed its voting and share consolidations to come public via an IPO. It set terms at 75 million shares with a $13.00 to $15.00 range. It has now listed Morgan Stanley and Bear Stearns as the joint book-runners; co-managers are listed as Citigroup, Wachovia, Banc of America, Cowen & Co, Jefferies, and Stifel Nicklaus.

SAIC has been in the IPO hopper for longer than anyone can recall, and it filed to raise up to $1.73 billion in proceeds via an IPO last year.

SAIC is a defense and government contractor and is a leading provider of scientific, engineering, systems integration and technical services and solutions to all branches of the U.S. military, agencies of the U.S. Department of Defense, the intelligence community, the U.S. Department of Homeland Security and other U.S. Government civil agencies, as well as to customers in selected commercial markets. SAIC has not been without controversy regarding contract appropriations, but in the government contract arena that seems status quo.

The company has 43,100 full-time employees and part-time employees. The U.S. Government is by far its largest customer with revenues as a percentage of all revenues as follows: 89% for 2006; 86% for 2005, and 85% for 2004. SAIC has a consolidated negotiated backlog listed on its balance sheet of just over $15 billion. Its fiscal 2006 (Jan 31 year-end) showed $7.792 billion in revenues with net income listed as $792 million. Its fiscal 2005 revenues were listed as $7.187 billion and net income of $409 million. SAIC listed total assets for January 31, 2006 as $5.655 billion, with $2.91billion in working capital, and it listed stockholders equity as $2.907 billion. Long-term debt was listed as $1.192 billion.

We think this is one name that many key holders will need to own in their investment portfolio as it is possible that the company will get a faster track into many stock indexes compared to other names. The IPO should debut by the end of next week according to investment calendars.

Jon Ogg is a partner at 24/7 Wall St.; he does not own securities in the companies he covers.