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Non-Tech : Tyco International Limited (TYC)
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To: kauaipi who wrote (3737)6/12/2007 5:52:33 PM
From: rich evans  Read Replies (1) of 3770
 
I did an evaluation some time ago. Here was my analysis:

My valuation for Tyco is $39/Share calculated as follows:

25% of business=Health--10billrevs x26%OM=$2600 EBIT 2600- $150( 1/4 total interest) =EBT. Net at 25% tax = $1.8bill / 500millshares(1/4 total of 2bill)= $3.66/share. PE of 20 = $73/share. 1/4 of that is $18 dollars.

30%=Electronics= 12000revsx 15%OM=1800 less 180 mill interest x .75(tax)= 1215 mill / 666mill shares =$1.82 x 18PE= 33 x .3= $10

45%=Fire/Security/Enginneering= 18billx 11.5%OM=$2070 -$270 interest=$1800x .75(tax)=$1350 mill /900millshares= $1.50 share x17 PE= $25.50 x 45%= $11

Total $11+10+$18 === $39share breakup value

Since then margins have come down in all three groups. Part of this reduction is the FAS123R stock option accounting. This means tyco should now be worth less I think is about 34-36 dollars a share. Next fiscal year starting in september should create a value at 39. JMHO.
Rich
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