When Dennis Kozlowski goes into a restaurant, the first thing he looks for is the water sprinklers on the ceiling. "Some 70% of public buildings in America don't have fire-protection systems at all," says Kozlowski, chairman and CEO of Tyco International, the world's largest maker of fire-protection systems. It's worse in Europe, he adds, where the figure is 90%.
Some investors are buying into Tyco for that very reason. They believe more laws will be passed, in the U.S. and overseas, making fire-prevention devices mandatory. Antifire products account for half of Tyco's revenues.
"We expect earnings momentum to expand in 1994-95, as world economies improve and prices strengthen," says analyst Carol Neves at Merrill Lynch. She may raise her earnings estimates because of the improving trends that she now sees in Tyco's markets. Her estimates of $2.75 for 1994 and $3.25 for 1995 could prove modest, she says. The stock trades at 51.
But there are other things happening at Tyco. "Kozlowski is getting ready to acquire a fifth unit to add to Tyco's four divisions that, we expect, will double the company's revenues," says a New York money manager. Tyco, he says, is eyeing an industrial company that fits its Simplex Technologies unit, which won a contract from American Telephone & Telegraph to supply fiber-optic cable for its Hawaiian interisland system connecting Kauai, Maui, Oahu, and the big island of Hawaii.