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Why The Brink's Company Stock Took It to the Bank This Week

By Howard Smith – Oct 29, 2021 at 3:20PM

Key Points

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Brink's reported a sharp swing to profitability year over year, and is returning capital to shareholders.

What happened

The Brink's Company (BCO -2.52%) did a good job bringing the money to its shareholders this week. Through mid-afternoon Friday, shares of the cash transport, logistics, and security company have soared more than 16% for the week, according to data from S&P Global Market Intelligence.

So what

This week's gains started after Brink's reported its third-quarter earnings on Wednesday. And investors kept trusting their cash with the security company the following days, too. Brink's reported a strong quarter with 11% revenue growth compared to the prior-year period, and a sharp rebound to profitability. The company reported earnings per share of $0.38 compared to a loss of $0.47 per share in the year-ago quarter. 

White armored truck in front of a bank.

Image source: Getty Images.

Now what

Though the company continues to battle impacts from the pandemic, it said revenue in the third quarter was back to 98% of pre-pandemic levels. One thing investors liked was that although Brink's said it is still being impacted in the U.S. by a labor shortage and wage pressures, it expects wage inflation to be fully covered by price increases moving into next year. 

But perhaps what investors liked most about the report was the company's announcement of an accelerated share repurchase plan to acquire $150 million of the company's common stock. It expects those repurchases to be completed by early November, when it will then enter into an additional $250 million share repurchase authorization that will be in place through 2023. 

Combined, those repurchases will reduce the share count by more than 10%. Investors like that boost as well as the confidence it represents, explaining the surge in shares since the company report earlier this week. 

Howard Smith has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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