Tuesday, March 5, 2002 11:23 a.m. ET
Dear Action Alerts PLUS Subscriber,
Can Tyco (TYC) ever come back? I think that Tyco, which did some things I didn't like, including allowing top execs to sell stock quietly and booking charges way too aggressively, got swept up in the vicious Enronitis wave that swept through the country.
Tyco was never as bad as Enron. Tyco has decided to play it as clean as possible going forward. Tyco's credit crunch issues will, I believe now, prove fleeting.
The stock is no longer down in the mid-$20s. But it is off today on another issue of accounting (Wall Street Journal Heard on the Street) and I don't think that issue is that important because it is a judgment call.
I want to take advantage of the decline and buy Tyco this morning, because with Enron on the back burner, this stock can go back to the high $30s, where it is more fairly valued.
After you read this I will buy 1,500 shares of Tyco. I am not forgiving Tyco for its mistakes, I am just taking advantage of the fact that this company is as cyclical as they come, and we are in a vicious cyclical rally -- so it is time to buy more.
Regards,
James J. Cramer
DISCLOSURE: At the time of publication, Cramer was long Tyco.
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