Quick Win by the Algorithm: New BCO Management Drives Impressive 125.41% Return

Quick Win by the Algorithm

On June 13th, 2016, the I Know First algorithm issued a bullish forecast for The Brink’s Company (NYSE:BCO). BCO had a signal of 207.75 and a predictability of 0.75. As a result, in accordance with the forecast, the company’s stock had a return of 125.41% within 1 year, showing a quick win by the algorithm.

Quick WIn

The Brink’s Company was founded in 1869 in Richmond Virginia. The company is an American security and protection company. It is perhaps best known for its armored trucks which carry valuable goods and money between institutions. Brink’s is a provider of security services to banks, retailers, governments, mints, and jewelers. The company has an international network in 100+ countries and employs approximately 150,000 people. 82% of its $3.9 billion revenues was earned outside the U.S. in 2013. 

Quick Win

The Brink’s Company has a difficult history. The company was struggling due to problems with their margins and reported a loss of $11.9 million in 2015 on revenue of around $3.1 billion. The year previous, the company had a loss of $83.9 million on revenue of $3.6 billion. Furthermore, one of their primary investors, Starboard Value LP publicly criticized Brink’s Company nearing the end of 2015. Management stated, “Brink’s has a world-class brand and we believe there is significant opportunity to create value…Unfortunately, shareholders have suffered through many years of missed expectations and dismal financial results”.

The industry knows Starboard for buying stock in companies which it considers undervalued and then pushing for changes in management and strategy. This is what Starboard did with Brink’s. After increasing its stake to around 12%, Starboard pressured Brink’s for internal reform. As a result, over 2016, the company brought in 3 new members to its board and various top executives replaced. The company’s chairman, president, and CEO since 2012, Thomas C. Schievelbein, retired in 2016 as part of this reform. The board replaced him with Douglas A. Pertz.

The industry generally recognizes Pertz as a “turnaround specialist”. The board cited his experience with turning multinational companies around as a strong reason for appointing him. Pertz bought $2.5 million worth of Brink’s common stock. The company announced in 2016 it had exited underperforming businesses. It also quoted restructuring and reorganization leading to $50 million in costs eliminated and $25 million in savings planned.

This turnaround in 2016 has since led BCO to continuously improved quarterly earnings reports. Now, Brink’s is at a 52-week high of $66.70 per stock. Given these factors, one can see why BCO has increased with such an impressive return rate.

This bullish forecast on BCO was sent to current I Know First subscribers on June 13, 2016. 

Before making any trading decisions, consult the latest forecast as the algorithm constantly updates predictions daily. You can use the algorithm for intra-day trading. The predictability tends to become stronger with forecasts over longer time-horizons such as the 1-month, 3-month and 1-year forecasts.