Tyco International (NYSE: TYC) is
a leading provider of security products and services, fire protection and detection products and services, valves and controls, and other industrial products. The firm has operations in more than 60 countries, employing 118,000 worldwide. Customers include commercial and shipping enterprises, governmental entities, military forces, transportation systems, original equipment manufacturers, engineering contractors and homeowners. General Electric (NYSE: GE) and Honeywell International (NYSE: HON) are major competitors.
The company pleased investors last week, when it reported Q3 EPS of 88 cents and revenues of $5.21 billion. Analysts had been expecting 67 cents and $5.15 billion. Each of the firm's five divisions posted double-digit increases in operating income. Management also guided FY08 EPS to $2.97-$2.99 ($2.76 consensus).
TYC shares
popped on the news and have since moved into a bullish "pennant" consolidation pattern. Prices frequently exit pennants moving in the same direction they were traveling on entry. In this case, that would be to the upside.
Brokers recommend the stock with one "strong buy", six "buys", three "holds" and two "underperforms". Analysts see a 22% average annual growth rate, through the next five years. The TYC Price to Sales ratio (1.04), Price to Book ratio (1.30), Price to Cash Flow ratio (9.03) and EPS Growth rate (60.00%) compare favorably with industry, sector and S&P 500 averages. Institutional investors hold about 89% of the outstanding shares. The stock is one of those used to calculate the S&P 100 and S&P 500 Indexes. Over the past 52 weeks, it has traded between $31.01 and $48.37. A stop-loss of $38.30 looks good here.
Larry Schutts is a contributing editor for Theflyonthewall.com and the Vice-President of Stockwinners.com. He does not hold positions in any of the stocks mentioned above.
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