Explain it to him when you come back empty handed.

 

 

Brinks turned 157 on May 5th.  What do you say to a 157 year-old who’s serious?  “ah, where do you workout?”  Yes.  You could also ask if they voted for Teddy Roosevelt.  In the case of Brinks you ask “when do we get another chance to get in?”

Panic is cheap–oops, we mean insanely expensive.  But so is going cheap in the face of a very real long term contender–Brinks(BCO).  So we got caught looking.  We’re always looking yo.  This time it simply proved stupid or slow.  Or were we human?

 

 

We were far from alone in missing the Brinks move.  Perhaps it will again come down enough for a sound entry point.  Our experience is informative.  Learn from our missteps.  We’re doing good market medicine.  Soundtrack; The White Stripes “Girl, You’ve got no faith in medicine.”

 

 

Know before you buy.  If you own it, know it.

 

 

Fundamental research forms the foundation of all good stock positions.  We start with the research and BCO has been no exception, unless you count a strong balance sheet, 7%y/y revenue growth, stunning EPS growth, dominant market position, a fast growing stock price, and a super-solid game plan for global expansion, along with roaring technicals all screaming “buy.”  We are speaking here of a company founded May 5, 1859.

 

On the Brinks website under Investor Relations find their shareholder slide presentations.  The newest is Q2, 2017 earnings.  Fabulous.  StockJaw had been all over Brinks for the last week.  We were watching on Monday as late in the session shares dipped 1.31% intraday.

 

http://investors.brinks.com/presentations-and-events/presentations/default.aspx

 

Stockjaw sat split.  Buy half now, or at least a third.  Then wait to fill it out, at a better price during the almost inevitable post-earnings dip.  This was a good plan, at the time.

Side two of our debate said to simply wait for the dip.  That’s it.  That side called it “discipline.”  Side One gave in as the trading clock for Monday ran out.  StockJaw sat tight.

Rocket boosters create a distinctive sound, even when competing with traffic din.  The rockets we heard came form Brinks.  Before appetizers reached restaurant tables in New York, BCO had leaped 13.29%.

 

Upon it’s introduction to the market, Plexiglass bannered the evening news.  Peter Jennings handed a young black man a brick.  That stupid brick bouncing off that gleaming Plexiglass remains the perfect image.  No way through now.  We should be on the opposite side of this BCO price jump.  How hard is that?

 

 

technology-785742_1920

 

 

 

BCO, Q2, 2017, reported 7-26-17; Revenue up 9%y/y, 6% of that organic, operating profit up 52%, EBITDA up 31%, and EPS up 64%.  Earnings up 64%.  Precisely, EPS .64 vs. consensus estimate of .46.  The company raised full year ’17 guidance by .40 cents or 15.6%, rantge 2.95-3.05.  Brinks also raised 2019 estimates.  In simple terms Brinks is roaring on all cylinders and snarling for more.   BCO has the market’s attention.

BCO is a buy when it comes back in.  Price dips have followed the last three earnings reports–all three great.  Watch for the dip on no bad news.  We want it below $75.

 

Biblical plagues sound bad.  But so what?  We watched the end of the Brinks money train disappear into a sweet peach dusk.  We had just been standing at the ticket window yo.  What did we come away with?  Nothing.  Zero shares.  We did however get to watch the entire event happen up close.

 

No one wants to put in the work only to watch the train leave the station without warning.  Jumping after a 13% move is called “chasing.”  Yet, the Brinks story is only warming up.  Stocks move in three directions–sideways is the third.  What next?

 

 

Learning before leaping is discipline.  Discipline always pays, even when missing a big move in the process.  StockJaw missed, but did not fudge our discipline.  Our discipline, and luck, have kept us from owning more ugly situations like UAA at $41.

 

businessman-2365538_1920

StockJaw

Images sourced from Pixabay.

https://pixabay.com/en/photos/

Additional resources:

http://www.investopedia.com/

https://www.schwab.com/public/schwab/client_home

 

2 Comments

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s