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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