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Tyco Stock Could Trade $70: Money Pro

Top trader Mike Murphy of Rosecliff Capital thinks a recent deal could unlock a whole lot of value in Tyco.

As you may remember, late last year Tyco said it planned to split itself into 3 independent companies - ADT North America residential security, flow-control products and services, and its fire and commercial security business.

Circumstances advanced this week, with Tyco announcing that Pentair will absorb Tyco’s flow control business for $4.6 billion.

"The combined company will have increased scale, broader geographic reach and greater access to high-growth attractive sectors," including energy, Pentair Chief Executive Randall Hogan said on a conference call. He added that he expects the combined company to earn more than $5 per share by 2015.

On the news Pentair shares soared 19 percent to $47.85, a fresh lifetime high.

“The deal really shows there’s a lot of underlying value in the (Tyco) companies,” says trader Murphy. “And (as a result of the Pentair deal) I think there will be a renewed focus on the value of these companies.”

Murphy has crunched the numbers behind the thesis and tell us, “I think Tyco can move into the $70 range. Although flow is out of the picture, the security business and the fire business both have great underlying growth stories – and are both strong acquisition targets.”






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Trader disclosure: On Mar 28, 2012, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders; Joe Terranova is long VRTS; Joe Terranova is long NXPI; Joe Terranova is long IBM; Joe Terranova is long MCD; Joe Terranova is long EMD; Joe Terranova is long MSFT; Joe Terranova is long JOY; Joe Terranova is long OXY; Joe Terranova is long LQD; Joe Terranova is long HIBB; Joe Terranova is long TBT; Brian Kelly is long XLF; Brian Kelly is long KRE; Brian Kelly is long MS; Brian Kelly is long SPY; Brian Kelly is long QQQ; Brian Kelly is short COPPER; Brian Kelly is short EUROSTOXX; Brian Kelly is short AUSSIE$; Brian Stutland is long AAPL; Brian Stutland is long C; Brian Stutland is long GS; Brian Stutland is long JPM; Brian Stutland is long WFC; Brian Stutland is long MS; Brian Stutland is long NFLX; Brian Stutland is long TLT; Brian Stutland is long INTC; Brian Stutland is long HFC; Brian Stutland is long VLO; Steve Cortes is long GOOG; Steve Cortes is long TREASURIES; Steve Cortes is short CAT; Steve Cortes is short AAPL; Steve Cortes is short LVS; Steve Cortes is short XLI; Steve Cortes is short SILVER

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Deutsche Bank (and/or affiliates) owns 1% or more of any class of common equity securities of QCOM
Deutsche Bank and/or its affiliate(s) has received non-investment banking related compensation from QCOM
QCOM has been a client of Deutsche Bank Securities Inc. within the past year, during which time it received non-investment banking securities-related services

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Rochdale Securities LLC ("Rochdale") is an institutional brokerage firm that does not make a market in equity securities and does not engage in investment banking. Rochdale and its affiliates, including its principals, may own securities of the companies which are subject of this report but do not own 1% or more of any class of common equity securities of any subject company.

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