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Strategies & Market Trends : Value Investing

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To: llackey who wrote (13950)	2/18/2002 6:02:07 AM
From: blankmind	Read Replies (3) of 78565

If the smear & fear campaign being waged against Tyco (TYC) is found to be meritless, the stock can easily go back in the 60's in no time. - Here’s why I don’t think Tyco is a total sham about to go under: - In Tyco’s Statement of Cash Flows for yr ending 9/30/01 - - under “Investing Activities,” it shows that Tyco used $9.7 bill of cash to buy other companies - under “Financing Activities,” it shows that Tyco issued only $6.3 bill of debt & common shares - my point is that at a minimum, $3.4 bill of free cash flow was used to make acquisitions. If Tyco were really strapped for cash; & in such a liquidity crunch, Tyco would have to of issued more than $9.7 bill in debt & such for the acquisitions - Put another way . . . the debt that’s growing on Tyco’s bal sheet is “normal & rational,” as it’s a function of the debt on the balance sheets of the companies they’re buying; along with the debt issued to come up with the purchase price All of the above may be a bit confusing. But for me, as a CPA, I haven’t been able to quite get my hands around Tyco’s financials - as they’re a bit complicated given all the acquisitions. But the above snippet of info shows that at a minimum, Tyco truly is what they say they are - that is a conglomerate which is making a ton of $$’s; & using some of it to buy up others - (note: I'm assuming Tyco isn't cooking its books & all of the 10K numbers are legite)

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