Meanwhile, giving its cyber-security and information technology segment a chance to become independent should help SAIC compete better against the many rivals that are looking to stake their claim to the rapidly growing industry. General Electric Company (NYSE:GE), for instance, has a substantial presence in providing military-grade networking equipment and protective measures including customized firewalls, encryption software, and other products to help secure military communications from hackers and other outside threats. General Electric Company (NYSE:GE) has extended and adapted those efforts to commercial applications through its General Electric Company (NYSE:GE) Information Security Technology Center as the need has become greater throughout the private sector, and having SAIC streamlined to hold its own against GE and other rivals should help bolster both SAIC, Inc. (NYSE:SAI) stock and that of its Leidos spinoff in the future.
What’s next for SAIC?
So far, SAIC has been moving slowly but steadily in its breakup moves, agreeing last month to sell its headquarters and hiring an executive to lead its national-security division within Leidos. The company is dealing with other costs from the restructuring, including professional fees and further costs of reducing its real-estate holdings and moving some of its employees.
For SAIC stock, the impact of the split will depend greatly on decisions that investors make after the two companies trade independently. If budget concerns continue, then the government-facing half of the company might well underperform the broader-based business, rewarding those who decide to sell off their SAIC, Inc. (NYSE:SAI) stock and hang onto shares of Leidos that they obtain in the split.
The article Will SAIC Stock Rise From Its Impending Split? originally appeared on Fool.com and is written by Dan Caplinger.
Fool contributor Dan Caplinger has no position in any stocks mentioned. The Motley Fool owns shares of General Electric and Raytheon.
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