bsa222000, excellent analysis I fish value screens then try to figure out why a company has a high return on equity, low price to cash flow, insider buys, and at a 52 week low. I only get a few a year, looks like the insider buy stat was bogus, I appreciate the info, I'll pass on this one.
Thanks for the info. I had noticed that analysts had been slowly revising estimates downward and foreign currency adjustments may add to this trend. Still, I don’t think that would justify a 35% drop in share price in less than a year. Even with EPS discounted to $1.30 the stock, while not exactly cheap, still seems a good value in the current environment.
BCO is not cheap. I am short. eps est have come down to ~$1.50 and I think they go lower. last yr true adj eps is ~1.30 and given trends this yr at best we might see flattish #s. best comp is loomis and that trades at 10x eps!? europe is a mess. Venezuela is worse. FX rate in VEnezuela is getting worse. they will most likely have to take another charge there in q2 (similar to q1). my guess is they back off guidance when they report q2. and by the way, the CEO did not actually buy. he exercised and then surrendered. net, net he has less equity ownership now than prior to transaction.
I got my eye on this one. Someday soon it will be a compelling buy. But there are some near term negatives which I'm worrried about:
1) The euro is damaged and Brinks does a lot of work in europe.
2) The CEO or CFO said that 2nd quarter is traditionally a weaker quarter and strength comes in the third and fourth.
3) Brinks has a major competitor who is undercutting BCO by 30%-40% and they have already captured one banking client because BCO would not lower it rates. The CEO believes that this competitor is acting silly, and it will end badly for them. He's seen this in the past and it usually ends up being good for Brinks in the long term.
So, I would say that this stock will continue to be weak until 2nd quarter results are reported.
Item number 3 could be more serious than the CEO thinks, but he is probably right.