Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Tyco (TYC) Scales New 52-Week High On Growth Impetus

By Zacks Investment ResearchStock MarketsMay 23, 2016 07:18AM ET
www.investing.com/analysis/tyco-(tyc)-scales-new-52-week-high-on-growth-impetus-200131508
Tyco (TYC) Scales New 52-Week High On Growth Impetus
By Zacks Investment Research   |  May 23, 2016 07:18AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 

Shares of security and protection services provider Tyco International Ltd. (NYSE:TYC) scaled a 52-week high of $41.17 on May 20, before closing the trading session a notch lower at $41.13. Despite its strong price appreciation, this Zacks Rank #4 (Sell) stock has enough fundamental strength to further drive its price upward. The stock is currently trading at a forward P/E of 20.0x and has long-term earnings growth expectation of 13.0%.

Growth Drivers

Tyco has been actively repositioning its portfolio to build a right mix of businesses and maximize long-term value for its shareholders. The company’s acquisition pipeline also remains attractive and complements its existing businesses. During second-quarter fiscal 2016, Tyco closed the acquisition of consumer analytics firm ShopperTrak for $175 million. This strategic acquisition positions Tyco as a one-stop-solution provider of monitoring systems, data and analytics capabilities to retail clients.

During second-quarter fiscal 2016, Tyco also signed a merger deal with the global diversified technology company, Johnson Controls Inc. (NYSE:JCI) . Per the deal, Tyco will own 44% equity in the joint company. Post merger, the companies plan to strengthen their building products and technology, integrated solutions and energy storage portfolios. Tyco believes that this acquisition will help it to expand its global footprint in the building-technology market, enhance shareholder value and launch innovative solutions.

With an improved and enriched product portfolio, the transaction creates immediate opportunities for near-term growth through cross-selling, complementary channel networks, and expanded global reach for established businesses. The new company will enjoy synergistic benefits worth $500 million through mutual sharing of resources over the first three years after closing of the transaction. These annual cost synergies are expected to be achieved by increasing efficiencies, eliminating redundancies, integrating the global branch networks, and leveraging the combined scale of business platform. In addition, the transaction is expected to create at least $150 million in annual tax synergies.

We are bullish on the company’s fortunes based on the relative stability of the global security and fire markets, as well as high and predictable cash generation and limited balance sheet risk. The company returns significant cash to shareholders through share buybacks and dividends. Tyco also continues to invest in its businesses to strengthen long-term competitive capabilities for both products and services.

All these measures probably raised investor confidence and drove the shares to a 52-week high.

Other Stocks to Consider

A couple of other stocks that look promising in the industry include Alarm.Com Holdings, Inc. (NASDAQ:ALRM) and SuperCom Ltd. (NASDAQ:SPCB) , both carrying a Zacks Rank #2 (Buy).



JOHNSON CONTROL (JCI): Free Stock Analysis Report

TYCO INTL PLC (TYC): Free Stock Analysis Report

SUPERCOM LTD (SPCB): Free Stock Analysis Report

ALARM.COM HLDGS (ALRM): Free Stock Analysis Report

Original post

Zacks Investment Research
Tyco (TYC) Scales New 52-Week High On Growth Impetus
 

Related Articles

Tyco (TYC) Scales New 52-Week High On Growth Impetus

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email