NEW YORK (The Deal) -- Starboard Value’s Jeff Smith last week reported owning an 8.2% stake in Brink's Co. (BCO), in a little-noticed securities filing that didn't provide any useful information about what the investor is hoping to achieve at the armored-car transport company.
The filing was bare bones, but investors should expect Smith or another activist to try to bust a hole in Brink's board if operational changes aren't forthcoming in the coming months. People familiar with Smith's thinking note that the activist has had conversations with Brink's officials and said he's concerned about how the company has significantly underperformed compared with Loomis (LMOIF), Brink's major armored-car transport rival.
Brink's has also come under pressure from another big insurgent investor in recent months -- Mario Gabelli -- whose Gamco fund is no stranger to activism. Gabelli reported owning an 8.14% stake in December in a filing that said he "continues to believe" that Brink's trades at a "significant" discount to its private market value. Put together with Starboard's stake, at least 16% of the company's ownership has serious reservations with how Brink's is performing. Starboard accumulated its stake between March and May.
Jeff Kessler, an analyst at Imperial Capital in New York, agrees that Loomis and Brink's have had dramatically different share-price performances in recent years. Between 2012 and 2015, Loomis shares have skyrocketed on the Stockholm Stock Exchange from 83 krona a share to 251 a share ($10 to $30). At the same time, Brink's stock has traded between $21 and $27 a share, jumping to about $33 only after Starboard made its May 4 activist filing.