Tyco International PLC does not qualify for either the Enterprising Investor or the more conservative Defensive Investor. The Defensive Investor is concerned with the low current ratio, the insufficient earnings stability or growth over the last ten years, and the high PB ratio. The Enterprising Investor is concerned by the level of debt relative to the current assets.
We evaluated 26 different companies this week to determine whether they are suitable for Defensive Investors, those unwilling to do substantial research, or Enterprising Investors, those who are willing to do such research. We also put each company through the ModernGraham valuation model based on Benjamin Graham’s value investing formulas in order to determine an intrinsic value for each. Here’s a summary of the ModernGraham Valuations.
Tyco International Limited is not suitable for either the Defensive Investor or the Enterprising Investor. The Defensive Investor is concerned by the low current ratio, lack of earnings stability or growth over the last ten years, and the high PB ratio.