SI
SI
discoversearch

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor.  We ask that you disable ad blocking while on Silicon Investor in the best interests of our community.  If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.
Non-Tech : Tyco International Limited (TYC)
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  
To: Terrapin who started this subject3/2/2004 11:59:12 AM
From: rich evans   of 3770
 
Tyco and normalized earnings

At last Quarter's conference call, a buyside analyst asked if tyco was at normalized earnings and the response was no way.

So tyco's future earnings and stock value is therefore subject to different valuations based on how much and how fast you judge tyco's ability to increase its margins to a normalized earnings level.

For example valuing tyco at its present 2004 estimates of 1.50/sh which equals about PE of 18. This is the same as the major competitors of tyco in the health field- Johnson and Johnson and Abbott. I have found that tyco tracks these two companies more then other conglomerates even though health is less then 25% of tyco's busniness.

But J&J and Abbott are two well run companies already at normalized earnings. Tyco increase in earnings to normalized say by 2006 gives tyco a good chance for stock price appreciation even with overall growth less then J&J or Abbott for example.

Right now ignoring this potential to get to normalized earnings, Tyco is probably fully valued. But the analysts can't project future earnings very well as they have no special insights as to how fast and how much tyco's earnings will improve to the Normalized level.

All we really know are tyco's projections and Breen's statements that it will happen faster then expected and surpise people.

So his Tyco a buy on the "come" of a quick increase to normalized earnings? ; or a hold as fully valued with expectation of gradual increases to normalized earning over the next few years despite slow growth especially after selling 2 bill/year worth of businesses, ;or is tyco a sell at full value, with uncertainty of how fast and how much margin improvement there will be and with better fish to fry elsewhere

Rich
Report TOU ViolationShare This Post
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  

HomeMailHotSubjectMarksPeopleMarksKeepersSettings
Terms Of UseContact UsCopyright/IP PolicyPrivacy PolicyAbout UsFAQAdvertise on SI
© 2025 Knight Sac Media.  Data provided by Twelve Data, Alpha Vantage, and CityFALCON News