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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: blankmind who wrote (13951)	2/18/2002 2:05:51 PM
From: Don Earl	Read Replies (1) \| Respond to of 78567

<<<the debt that’s growing on Tyco’s bal sheet is "normal & rational,">>> Shareholder equity is $31 billion. Goodwill is $35 billion. Is it "normal and rational" to leverage a company to a point where tangible book value is in the red? I'd rather pet a snake.

To: blankmind who wrote (13951)	2/18/2002 6:01:38 PM
From: Logain Ablar	Read Replies (3) \| Respond to of 78567

blankmind: TYC may be going to 60 but i have it as a teenager b/4 the end of summer if it doesn't hold its recent lows. Message 17077257 I think our main difference of opinion lies in your assumption its not cooking its books. I'm assuming it has been agressive in its accounting and it has more of the piper to pay. Of course if it is earning $2.8 a share (70cents times 4) this year then it is a value. I just question the $2.8. How much of a charge does it have to take when it sells CIT ($3 Billion pre tax, I read the book value is $11B) and what is the impact on the loan covenants. With TYC having to hit its credit lines (the non CIT portion) one has to wonder if its so cash positive why did it need so much commercial paper.

To: blankmind who wrote (13951)	2/18/2002 11:23:17 PM
From: Madharry	Read Replies (2) \| Respond to of 78567

You are a cpa and admit you have difficulty understanding the financials. I am an ex-banker who years ago audited several units of CIT. My opinion at that time was that inexperienced credit managers were approving risky transactions that I would not have. A leasing company is very difficult to analyze without having a heck of a lot of information- there are all types of leases and all types of assumptions made regarding residual values. Therefore the cash flow may or may not be real and accurate. It is impossible to tell. Of course that is just one piece of the puzzle. There are certainly accounting issues with respect to GX accounting and there is probably some spillover to TYCO. I also question why after being a successful conglomerate for many years management decided to split into separate companies. Do you understand why?