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Non-Tech : Tyco International Limited (TYC) -- Ignore unavailable to you. Want to Upgrade?

To: JDN who wrote (901)	12/9/1999 1:09:00 PM
From: Bosco	Read Replies (1) \| Respond to of 3770

Dear John - here lies the heart of the matter. As a backgrounder, it has to be understood TYC's growth is tied to its acquisition. While it may be unfair for Tice to single out TYC with its acquisition strategy, the net effect is that TYC, even Mr K said so, is going to use other methods for acquisition purposes. At first, I erroneously believed TYC had a strong free cash flow. If so, it wouldn't affect TYC's growth since it could use cash for acquisition. Then, Morningstar article dropped the bomb on me. It said that TYC p/cf was 41 [likely to be TTM] when the stock was around $41. Some of the people here disputed the number. The lowest number we got is 23 when the stock was $37. In conclusion, the question is can TYC continue its 40% gorwth with only the cash flow to fuel its acquisition growth? Different people can have different answer, since this is a future event. To me, this is not yet blood in the street. Just my 2c best, Bosco

To: JDN who wrote (901)	12/9/1999 6:55:00 PM
From: Chuzzlewit	Read Replies (2) \| Respond to of 3770

JDN, Here are the operating cash flow numbers as reported in the company's most recent 10-Q: OCF for 9 mos. ending June, 1999 $2,058 MM. Annualized, that is roughly 2,744 MM. As of that date, there were 824.7MM shares o/s (basic), which translates to OCF of $3.37 per share. I have heard analysts estimate $3.2BB in CF for the coming year. Given even modest internal growth of 10% - 15%, I don't think that 15x next year's cash flow is unreasonable. That would price the stock at around $58.31 per share, based on OCF of $3.2 BB. TTFN, CTC