Brinks to pro­tect de­liv­er­ies of pot

Houston Chronicle - - BUSINESS -

Brink’s Co., best known for its ar­mored trucks, may have just turned it­self into a de­riv­a­tive pot play.

Brink’s has reached a mul­ti­year agree­ment with Canopy Growth Corp. to pro­vide “se­cure lo­gis­tics and cash man­age­ment ser­vices” for the cannabis com­pany, in­clud­ing in­ter­na­tional ship­ments of weed, the com­pa­nies an­nounced Thurs­day.

This is likely to send Brink’s stock higher and maybe even qual­ify it for in­clu­sion in cannabis-fo­cused ex­change-traded funds like the ETFMG Al­ter­na­tive Har­vest ETF, ac­cord­ing to James Cle­ment, an­a­lyst at Buck­ing­ham Re­search Group, who gives Brink’s a buy rat­ing and $110 price tar­get.

It may also be a safer way to play the mar­i­juana space with­out bet­ting on volatile pot stocks, Cle­ment said. Brink’s shares gained 1.8 per­cent in early trad­ing.

“Most so-called ‘cannabis stocks’ aren’t prof­itable and sell at strato­spheric mul­ti­ples of rev­enue ver­sus BCO, which trades at more tra­di­tional val­u­a­tions of earn­ings and real free cash flow,” Cle­ment wrote. “With BCO, an in­vestor can get some cannabis ex­po­sure with­out the val­u­a­tion bub­ble risk that some per­ceive in the space, in our opin­ion.”

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