Brinks (BCO) has posted several positive earnings surprises and is now a Zacks #1 Rank (Strong Buy).
The Brink's Company engages in the provision of secure transportation, cash logistics, and other security-related services to banks and financial institutions, retailers, government agencies, mints, jewelers, and other commercial operations. Its services include cash-in-transit armored vehicle transportation; automated teller machine services, including cash replenishment, monitoring and forecasting capabilities, deposit pick-up, and processing services. The Brink's Company was founded in 1838 and is headquartered in Richmond, Virginia.
Brinks Tops Estimates in Five of Seven Quarters
Brinks topped the Zacks Consensus Estimate in five of the last seven quarters. The average surprise over the last seven quarters was $0.055 above the Zacks Consensus Estimate which works out to be an average beat of more than 13%. As a result of the positive earnings surprises, the stock has moved higher by an average of 1.5% following the earnings releases.
The largest price movement in the stock came the day after the company reported the March 2012 quarter. Brinks reported a topline result of $967 million, in line with the Zacks Consensus Estimate and up 6% from the year ago period. EPS of $0.58 was $0.19 higher than the $0.39 Zacks Consensus Estimate and the stock moved higher by about 18%.
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Brinks Has Also Missed
On two occasions, Brinks has missed the Zacks Consensus Estimate. The June 2011 quarter saw a 6% miss while the December 2011 saw an 11% miss. Only the December 2011 quarter saw the stock trade lower in the session following the release. Brinks traded lower by almost 17% as a result of the miss.
Brinks Sees Estimates Moving Higher
Brinks has seen earnings estimates move higher following the recent positive earnings surprise. The Zacks Consensus Estimate for 2012 was as low as a loss of $2.05 in March 2012 and has since moved higher to $2.32.
Brinks valuation is something value investors would like so aggressive growth investors will probably love it. Its trailing and forward PE trades at a discount to the industry average, as does its price to book multiple and its price to sales multiple. With all the metrics at a discount, one only has to look at the two recent earnings disappointments to see why the stock only trades at 10x forward earnings.
A quick look at the price and consensus chart shows a drastic drop back in late 2008 as the financial crisis put doubt in the minds of many that there would be a need for physical cash. The crisis has done considerable damage as the stock has not recovered at all since then. The growth of earnings over the last few years has not yet reached the stock. As investors begin to realize that estimates are increasing it is likely that we see price appreciation. Brinks is a Zacks #1 Rank (Strong Buy).
Brian Bolan is the Aggressive Growth Stock Strategist for Zacks.com. He is also the Editor in charge of the Zacks Home Run Investor service
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