Brink's New CEO Has Skin In The Game

| About: The Brink's (BCO)
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Summary

Brinks New CEO has bought $2.5 million dollars worth of stock with his personal funds.

Starboard Value and Scopia Capital Management have taken large equity stakes in the company.

Brinks looks primed for a strong turnaround attempt or an outright sale to a strategic buyer.

The Brink's Company (NYSE: BCO), announced June 10 that its board of directors has appointed Douglas A. Pertz as president, chief executive officer and director of the company, effective immediately. Pertz succeeds George I. Stoeckert, who served as interim CEO following the retirement of Thomas C. Schievelbein on May 6. Stoeckert will continue to be at the company's Richmond headquarters until early July to ensure a smooth hand-off as Pertz transitions into his role as full-time CEO by July 11. Pertz most recently served as president and CEO of Recall Holdings Limited (ASX: REC), a global provider of digital and physical information management and security services from 2013 until 2016. He led the initial public offering of Recall in 2013 and negotiated the company's $2.9 billion acquisition by Iron Mountain, Inc. (NYSE: IRM) in 2016, more than doubling its equity value over that period. What was not said but understood that, "We are hoping he can do the same for us".

Peter Feld on behalf of the BCO board said that " We appreciate Doug's confidence and commitment to Brink's as evidenced by his $2.5 million purchase of Brink's common stock using his own personal funds." Peter Feld is a Managing Partner at Starboard Value LLP which has acquired 9.31% of BCO (source Gurufocus.com). Another New York based hedge fund Scopia Capital Management (Jeremy Mindich and Matt Sirovich) has taken a 8.16 % of the equity of the company. Starboard website states that "Starboard invests in deeply undervalued companies and actively engages with management teams and boards of directors to identify and execute on opportunities to unlock value for the benefit of all shareholders."

Interestingly Pertz purchase is the first significant insider buy in quite a while. Looks like the hedge funds have given Pertz marching orders to unlock value and shake things up.

Insider

Position

Date

Buy/Sell

Shares

Shares Owned Following This (Direct & Indirect)

Trade Price ($)

Cost ($1000)

Share Ownership Details

Pertz Douglas A

President and CEO

2016-06-09

Buy

83,696

103,472

$29.87

2500

103,472 (Direct)

Watson Patricia A

VP & Chief Information Officer

2015-06-02

Sell

1,162

23,165

$32.15

37.36

23,165 (Direct)

Zukerman Amit

Executive Vice President

2015-05-22

Sell

4,864

11,386

$31.79

154.63

11,386 (Direct)

TURNER RONALD L

Director

2015-05-22

Sell

2,897

1,727

$31.85

92.27

1,727 (Direct)

ALEWINE BETTY C

Director

2015-05-15

Sell

2,796

15,113

$33.20

92.83

15,113 (Direct)

Marshall McAlister C II

VP and Gen Counsel

2015-05-08

Sell

18,251

34,579

$32.70

596.81

34,579 (Direct)

Tyson Holly R

VP and Chief HR Officer

2015-05-06

Sell

29,071

40,365

$32.38

941.32

40,365 (Direct)

TURNER RONALD L

Director

2014-06-10

Sell

4,624

0

$28.35

131.09

ALEWINE BETTY C

Director

2014-04-29

Sell

3,423

9,236

$25.34

86.74

9,236 (Direct)

SCHUMACHER MATTHEW AP

Controller

2013-10-30

Sell

11,749

9,554

$31.23

366.92

9,554 (Direct)

Dziedzic Joseph W

Vice President and CFO

2013-08-12

Sell

19,135

51,548

$27.98

535.4

51,548 (Direct)

BRESLAWSKY MARC C

Director

2013-06-24

Sell

13,872

4,624

$25.14

348.74

4,624 (Direct)

TURNER RONALD L

Director

2013-05-08

Sell

4,624

0

$26.75

123.69

ALEWINE BETTY C

Director

2013-04-30

Sell

1,679

8,035

$26.59

44.64

8,035 (Direct)

Rokosz Ronald F

VP - International

2012-12-12

Sell

20,000

8,923

$28.93

578.6

8,923 (Direct)

Rokosz Ronald F

VP - International

2012-08-10

Sell

3,946

8,923

$22.84

90.13

8,923 (Direct)

BRESLAWSKY MARC C

Director

2012-05-31

Sell

4,624

4,624

$22.99

106.31

4,624 (Direct)

ALEWINE BETTY C

Director

2012-05-01

Sell

2,358

5,090

$25.67

60.53

5,090 (Direct)

ALEWINE BETTY C

Director

2011-05-13

Sell

4,624

2,824

$30.43

140.71

2,824 (Direct)

BRESLAWSKY MARC C

Director

2011-05-10

Sell

4,624

4,624

$30.46

140.85

4,624 (Direct)

The charts below shows various yield based metrics for BCO. The stock price has not appreciated much in the last decade. Cash Return is steady and decent. Dividend is mediocre at 1.3% with no stock buybacks. Debt is on the high side but interest is well covered by EBITDA.

Compared to Loomis (the market leader), Brink's looks generally bad, with lots of room for improvement. If new management can close the gap, the stock can perk up substantially. However any turnaround will likely be a multi-year affair. The business is quite capital intensive (armored trucks are not cheap) and competition is very stiff with the competitors lacking pricing power.

Company

Revenue ($Mil)

Market Cap ($Mil)

PE (NRI)

P/S

P/B

Oper. Margin (%)

Net Margin (%)

ROA (%)

ROE (%)

EV/EBIT

EV/Sales

Yield (%)

Loomis AB

$2,001

1,975

14.37

0.97

2.74

9.96

6.77

7.75

19.86

12.56

1.24

3.26

The Brink's Co

$3,007

1,440

0

0.5

4.29

1.91

-0.4

-0.6

-3.33

28.45

0.59

1.36

However with a strongly incentivized new CEO and a clear mandate from controlling shareholders, who will want to exit at a profit, BCO appears to be primed to move higher.

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.