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Why Brink's Shares Jumped Today

By Travis Hoium - Apr 25, 2013 at 4:11PM

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Is this meaningful or just another movement?

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of armored transport service provider Brink's (BCO -0.68%) jumped 10% today after the company reported first quarter results.

So what: Revenue was up 4%, to $977 million, on 6% organic growth, but earnings per share dropped to $0.04, from $0.43 a year ago. On an adjusted basis, earnings per share were $0.35, $0.05 short of estimates, but investors looked past this because management said it would be able to overcome a robbery earlier this year, and generate a 6%-8% profit margin. 

Now what: The first quarter was hit by a robbery in Belgium, but higher-than-expected growth in 2013 more than offset that loss. Management expects 6% to 8% organic growth, which is well over expectations. I wouldn't buy on the pop today, but if shares pullback in coming weeks, the stock's forward P/E ratio of 13 is reasonable given the steady nature of this business.

Interested in more info on Brink's? Add it to your watchlist by clicking here.

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