The Brink's Company (BCO)

Their P/E is solid and so is their dept or should I say complete lack there of. There shares are down almost 50% over the year's high and about the say as their average before the melt down. This solid company doesn't seem to going anywhere but back up.

Showed up on a screen for solid 5 year growth with low debt, cash on hand and still at attractive P/E ratios.

sold by mistake

No rush to get in here, but I do think that the market will eventually start to value this company more given its leadership position and barriers to entry into this industry.

As a couple of fools have already said, this is a very complex company to analyze when looking at their financials so I will leave it to them since I had to ask many questions that would normally seem stupid, but I later found that they were very good questions and helped a lot for me to just get a reasonable understanding to the structure , history, and how it all came together so I could better evaluate the company.

I do feel from my current understanding that this is a very good opportunity to get in.

Although it may seem due to the economy that this could be an area where people might cut back on spending when in fact, this is the best time to think about what you have and how to safe guard it.

Layoffs are still occurring and regardless of what the unemployment numbers tell you, think about one thing. It's going on a year now and you will probably start seeing less people in the unemployment lines and there is only 1 reason for that right now and definitly in the months ahead,

Their unemployment is running out...............................

Of course the unemployment numbers will look better, you can only draw benefits for so long. Eventually something will have to give and there will be a lot of desperate people when this happens if something does not happen to get them back to work so they can feed their family.

This is just an important opinion I don't think a lot of people have thought about when it comes to the governments unemployment numbers because you can bet they are not going to tell you why the number of people filing is getting lower, and so far, I have not heard of any call backs worth talking about.

Chasing the dream

This stock got hammered to the downside after its earnings disappointment in July. I think Mr. Market was a bit harsh considering the reasons for the earnings miss were all temporary (i.e. - currency translation, higher than expected pension costs and low demand for transport of diamonds). Brinks is an extremely difficult company to analyze because its history is somewhat complex. In 2005 it sold off its "coal related assets" and used most of the proceeds for a stock buyback. In 2008, it spunoff its home security related businesses. What is left is the core business that Brink's is famous for -- secure cash, gold and jewelry management. My best estimate is that Brink's can grow this core business at a pace that mirrors nominal worldwide economic growth (which should be 5 or 6% going forwards). I estimate that future returns on reinvested equity should be approximately 22% per year, but this estimate has high variability depending on the amount of deferred taxes, unfunded pension liabilities and cost of new acquisitions. If my estimates of growth and return on equity are roughly correct, then I think this company will eventually be priced at approximately 20 times earnings. It is possible that the company will enjoy higher multiples based on the strength of its brand name. The consensus for 2010 earnings is $2.30 per share. If Brinks attains these estimates, my price target is $46 per share by mid 2010.

Very Strong Fundamentals

GOOD BUSINESS

good stock

This company's forward EV/EBITDA multiple of roughly 3x (even in this environment) is just way to cheap. Taking into account the current difficult economic environment as well as the qualitative and quantitative attributes of this business, a multiple 2x today's seems much more appropriate in my opinion. After all, BCO is a financially strong (debt free), competitively entrenched, relatively recession resistant business that earns solid returns on assets and equity.

In time, I think Mr. market will come to his senses and award a much more rational multiple on this type of business of 6-7x. When he does, investors who purchased at or around today's depressed prices should earn a double or more. Outperform.

This is a bit of a gamble, but the BHS spinoff could be very profitable.

10.000

company is a cash flow machine, spin-off of more capital intensive BHS will bode well for the remaining Brink's which has seen faster revenue/operating income growth with less capex.

you may even want to keep BHS. Most of its capex is for new installations of home security systems. Churn is quite high @ 8%+ which sucks - but they writeoff the capex that is wasted on cancelled accts. Most of their 90%+ of their capex is therefore assumed to be for incremental growth purposes - not a bad thing at all!!

Trading at 8x FCF, Brink's can easily go uptowards 15-20x given international growth prospects/demand, while I expect BHS to trade at around 10-15x FCF depending on the state of the US economy when the shares are spun off.

Nice-

Seems well diversified business with solid revenue which will be required irrespective of economic conditions

Tax-free spin-off to shareholders of two operating subsidiaries could occur. Even so, both subsidiaries are performing well, and Brink's has an excellent cash flow relative to current share price without the spin-off. Potential for shareholder gain either way.

pressure to spinoff business will lead to increased valuation for both.