Teradyne Message Board - Msg: 14380439

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Technology Stocks : Teradyne

TER 190.43

+2.8%

3:59 PM EST

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To: Just_Observing who wrote (1073)	9/13/2000 9:56:31 PM
From: Maverick	of 1184

ML eludes that TER might spin-off its CS BU to unlock shareholder value Frm ML Research 9/11/00: "We estimate that 20% of our $4.00 EPS will come from contract manufacturing (Connection Systems) were the closest comparable is Sanmina. If we value this portion of the EPS at 50x like Sanmina, that yields a $40 price. The remaining $3.20 even at only 20x 2001, yields $64. Thus, the sum of the parts valuation is $104. This is nearly our price target even with a very low P/E on the semiconductor equipment portion. Lastly, the management is showing its desire to unlock shareholder value. The proactive change in structure for the software testing unit should allow the hidden value of this unit to be discovered." This may elude that TER might spin-off its CS BU. I've witnessed when an investment banker had been so bullish about a co. for a long time it was eventually awarded w/ a deal such as being underwriter for a spin-off. I am sure this is what ML had in mind. But rightfully TER is down right cheap. It could easily be $100 stock when it spin-offs its Connection Systems Biz Unit.

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