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Is The Brink’s Company (BCO) Going to Burn These Hedge Funds?

Is The Brink’s Company (NYSE:BCO) a good investment right now? We check hedge fund and billionaire investor sentiment before delving into hours of research. Hedge funds spend millions of dollars on Ivy League graduates, expert networks, and get tips from industry insiders. They sometimes fail miserably but historically their consensus stock picks outperformed the market after adjusting for known risk factors.

The Brink’s Company (NYSE:BCO) investors should be aware of an increase in hedge fund sentiment recently. BCO was in 24 hedge funds’ portfolios at the end of September. There were 19 hedge funds in our database with BCO positions at the end of the previous quarter. Our calculations also showed that BCO isn’t among the 30 most popular stocks among hedge funds.

In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s flagship best performing hedge funds strategy returned 6.3% year to date (through December 3rd) and outperformed the market even though it draws its stock picks among small-cap stocks. This strategy also outperformed the market by 18 percentage points since its inception (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.

AQR CAPITAL MANAGEMENT

We’re going to take a peek at the latest hedge fund action surrounding The Brink’s Company (NYSE:BCO).

What have hedge funds been doing with The Brink’s Company (NYSE:BCO)?

At Q3’s end, a total of 24 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 26% from the second quarter of 2018. On the other hand, there were a total of 24 hedge funds with a bullish position in BCO at the beginning of this year. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

BCO_dec2018

When looking at the institutional investors followed by Insider Monkey, P2 Capital Partners, managed by Claus Moller, holds the largest position in The Brink’s Company (NYSE:BCO). P2 Capital Partners has a $120.4 million position in the stock, comprising 10.8% of its 13F portfolio. Sitting at the No. 2 spot is Deccan Value Advisors, led by Vinit Bodas, holding a $92 million position; the fund has 6.8% of its 13F portfolio invested in the stock. Remaining members of the smart money with similar optimism contain Mitch Kuflik and Rob Sobel’s Brahman Capital, Matthew Sidman’s Three Bays Capital and Cliff Asness’s AQR Capital Management.

As one would reasonably expect, specific money managers have been driving this bullishness. Park West Asset Management, managed by Peter S. Park, initiated the largest position in The Brink’s Company (NYSE:BCO). Park West Asset Management had $21 million invested in the company at the end of the quarter. Paul Marshall and Ian Wace’s Marshall Wace LLP also initiated a $20.9 million position during the quarter. The other funds with brand new BCO positions are Michael R. Weisberg’s Crestwood Capital Management, Joel Greenblatt’s Gotham Asset Management, and George Hall’s Clinton Group.

Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as The Brink’s Company (NYSE:BCO) but similarly valued. We will take a look at UMB Financial Corporation (NASDAQ:UMBF), Liberty Latin America Ltd. (NASDAQ:LILAK), SM Energy Company (NYSE:SM), and Uniti Group Inc. (NASDAQ:UNIT). This group of stocks’ market caps are closest to BCO’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
UMBF 11 54261 -1
LILAK 19 394253 0
SM 25 580195 3
UNIT 14 268082 -4
Average 17.25 324198 -0.5

View table here if you experience formatting issues.

As you can see these stocks had an average of 17.25 hedge funds with bullish positions and the average amount invested in these stocks was $324 million. That figure was $537 million in BCO’s case. SM Energy Company (NYSE:SM) is the most popular stock in this table. On the other hand UMB Financial Corporation (NASDAQ:UMBF) is the least popular one with only 11 bullish hedge fund positions. The Brink’s Company (NYSE:BCO) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard SM might be a better candidate to consider a long position.

Disclosure: None. This article was originally published at Insider Monkey.

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