Why Pep Boys, Brink's, and Safeway Tumbled Today

Stocks posted an impressive rebound from a midday slump, but these stocks didn't join in the bounce. Find out why.

Apr 15, 2014 at 8:05PM

Tuesday was a day of wild swings for the stock market, with triple-digit moves in both directions finally settling out to sizable gains for the major market benchmarks. Even as investors continued to hope for better economic conditions around the world to improve prospects for global companies, several stocks failed to follow the general trend of the market higher. Among them were Pep Boys (NYSE:PBY), Brink's (NYSE:BCO), and Safeway (NYSE:SWY), whose share prices fell dramatically today -- although with Safeway, there's a catch that investors need to be aware of before drawing the wrong conclusion.

Pep Boys plunged 15% after the auto merchandise and repair chain announced disappointing quarterly results this morning, including a surprise loss when investors had expected a modest profit. Same-store merchandise sales fell 3%, largely offsetting gains in service-related revenue and reflecting lower retail prices for tires. The bigger question for Pep Boys, though, is whether its hybrid parts-and-service model will prove to be more effective than the pure-play parts strategy that many of its rivals use. Given the age of cars on the road today, there's little doubt that many auto owners need Pep Boys and its peers, but whether they'll actually take advantage of parts and service retailers is another question entirely.

Security specialist Brink's dropped 11% after the company said that it would have to write down the value of its Venezuelan operations using the devalued exchange rate for the Venezuelan bolivar. U.S. investors might not be aware of the international nature of Brink's security services, but Brink's got almost 45% of its revenue last year from Latin America, almost doubling its North American revenue. Moreover, with Latin America giving Brink's more of its operating profits than any other, the hit from the Venezuelan asset writedown will be much more extensive than most investors in Brink's expect.


Safeway's share price fell by 10% today, but the drop merely reflected the grocery chain's spinoff of its Blackhawk Network Holdings shares, which was completely yesterday afternoon. Under the spinoff, Safeway shareholders received about 164 shares of Blackhawk for every 1,000 Safeway shares they held, worth roughly $4 per Safeway share and matching today's price drop in Safeway stock. Blackhawk's high-growth prepaid payment and product services businesses gave Safeway an interesting level of diversification, but the transaction will help Safeway focus more on maximizing the value of its grocery business as it works to complete its merger with Albertsons later this year.

3 stocks poised to be multi-baggers
The one sure way to get wealthy is to invest in a groundbreaking company that goes on to dominate a multibillion-dollar industry. Our analysts have found multi-bagger stocks time and again. And now they think they've done it again with three stock picks that they believe could generate the same type of phenomenal returns. They've revealed these picks in a new free report that you can download instantly by clicking here now.

Dan Caplinger and The Motley Fool have no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

1 Key Step to Get Rich

Our mission at The Motley Fool is to help the world invest better. Whether that’s helping people overcome their fear of stocks all the way to offering clear and successful guidance on complicated-sounding options trades, we can help.

Feb 1, 2016 at 4:54PM

To be perfectly clear, this is not a get-rich action that my Foolish colleagues and I came up with. But we wouldn't argue with the approach.

A 2015 Business Insider article titled, "11 websites to bookmark if you want to get rich" rated The Motley Fool as the #1 place online to get smarter about investing.

"The Motley Fool aims to build a strong investment community, which it does by providing a variety of resources: the website, books, a newspaper column, a radio [show], and [newsletters]," wrote (the clearly insightful and talented) money reporter Kathleen Elkins. "This site has something for every type of investor, from basic lessons for beginners to investing commentary on mutual funds, stock sectors, and value for the more advanced."

Our mission at The Motley Fool is to help the world invest better, so it's nice to receive that kind of recognition. It lets us know we're doing our job.

Whether that's helping the entirely uninitiated overcome their fear of stocks all the way to offering clear and successful guidance on complicated-sounding options trades, we want to provide our readers with a boost to the next step on their journey to financial independence.

Articles and beyond

As Business Insider wrote, there are a number of resources available from the Fool for investors of all levels and styles.

In addition to the dozens of free articles we publish every day on our website, I want to highlight two must-see spots in your tour of fool.com.

For the beginning investor

Investing can seem like a Big Deal to those who have yet to buy their first stock. Many investment professionals try to infuse the conversation with jargon in order to deter individual investors from tackling it on their own (and to justify their often sky-high fees).

But the individual investor can beat the market. The real secret to investing is that it doesn't take tons of money, endless hours, or super-secret formulas that only experts possess.

That's why we created a best-selling guide that walks investors-to-be through everything they need to know to get started. And because we're so dedicated to our mission, we've made that available for free.

If you're just starting out (or want to help out someone who is), go to www.fool.com/beginners, drop in your email address, and you'll be able to instantly access the quick-read guide ... for free.

For the listener

Whether it's on the stationary exercise bike or during my daily commute, I spend a lot of time going nowhere. But I've found a way to make that time benefit me.

The Motley Fool offers five podcasts that I refer to as "binge-worthy financial information."

Motley Fool Money features a team of our analysts discussing the week's top business and investing stories, interviews, and an inside look at the stocks on our radar. It's also featured on several dozen radio stations across the country.

The hosts of Motley Fool Answers challenge the conventional wisdom on life's biggest financial issues to reveal what you really need to know to make smart money moves.

David Gardner, co-founder of The Motley Fool, is among the most respected and trusted sources on investing. And he's the host of Rule Breaker Investing, in which he shares his insights into today's most innovative and disruptive companies ... and how to profit from them.

Market Foolery is our daily look at stocks in the news, as well as the top business and investing stories.

And Industry Focus offers a deeper dive into a specific industry and the stories making headlines. Healthcare, technology, energy, consumer goods, and other industries take turns in the spotlight.

They're all informative, entertaining, and eminently listenable ... and I don't say that simply because the hosts all sit within a Nerf-gun shot of my desk. Rule Breaker Investing and Answers contain timeless advice, so you might want to go back to the beginning with those. The other three take their cues from the market, so you'll want to listen to the most recent first. All are available at www.fool.com/podcasts.

But wait, there's more

The book and the podcasts – both free ... both awesome – also come with an ongoing benefit. If you download the book, or if you enter your email address in the magical box at the podcasts page, you'll get ongoing market coverage sent straight to your inbox.

Investor Insights is valuable and enjoyable coverage of everything from macroeconomic events to investing strategies to our analyst's travels around the world to find the next big thing. Also free.

Get the book. Listen to a podcast. Sign up for Investor Insights. I'm not saying that any of those things will make you rich ... but Business Insider seems to think so.

Compare Brokers