Rockwell on the prowl? Message Board

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Technology Stocks : Rockwell on the prowl?

ROK 398.22

-0.2%

9:30 AM EST

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To: go4it who wrote (140)	11/11/1998 9:22:00 AM
From: FACTUAL	of 152

I believe ROK has 200 million shares outstanding. Post spin ROK is expected to do about $2.90-$3.00 per share for FY 99 ( year ending Sept 99) . With a 15-17 multiple, ROK will be a $45-51 stock post spin. Current purchasers of the stock can see that as well as get 1 share of the new company for every one share of ROK stock. Given that ROK is indicating that semi sales are $1.2B the stock would trade for about$5-$6 ( which multiplied by 200 million gives about $1.2B ) for something close to one times sales. The semi group has also announced a reverse split which should take the semi shares to $ 10 or so, but every ROK share will now give you only 0.5 shares in semi business. Any way you slice it this package is worth north of $45 ( $3 EPS for ROK @ PE of 15 ). ROK price rising as market gains confidence that spin will happen. If spin happens I expect ROK to rise a bit more to about $50 and ROK holders will also get paper in new semi stock, worth about $5 If that scenario happens then you have a package of $55 value that you can get by buying ROK today at $47 or so a good return of about 16% in the next few months. Once semi is out ROK equity holders can get back to a more peaceful life with a high dividend stock and solid, stable business. If spin does not happen watch out!

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