ANALYSIS-Smart money sees Brink's Home Security as a 'rock'

* Brink's Home Security model seen cash-flow rich

* Brink's a top new position in Q4 for largest hedge funds

* Analysts say model misunderstood, stock undervalued

* Seen benefiting from security fears in a recession

By Nick Carey

CHICAGO, March 16 (Reuters) - It would be hard for many to imagine hedge funds buying stock in a U.S. company with the word "home" in its name in the worst housing downturn since the Great Depression -- let alone speak admiringly of its solid cash flow and growth prospects.

But to a number of hedge funds, Brink's Home Security Holdings Inc (CFL.N) is just such a company, benefiting from long-term solid cash flow and more security-conscious consumers who fear rising crime as the nation's economic slump drags on.

"With its very predictable cash flow, this stock is the Rock of Gibraltar," said a principal at a hedge fund that has owned Brink's shares for years. He said he could not be quoted on the record, in part because the fund was considering raising its stake in the home-security system provider.

"Hedge funds are a suspicious bunch," he said. "We don't want to be out there talking about this stock while we're thinking of buying more of it."

He calculates that BHS, which is trading at around $21, is 75 percent undervalued.

Irving, Texas-based Brink's Home Security is a spinoff from Richmond, Virginia-based security company Brink's Co (BCO.N).

BHS provides home-security monitoring services, with 1.3 million subscribers across all 50 U.S. states and two Canadian provinces.

In what might come as a surprise to many, this relatively small company -- with 2008 revenue of $532.3 million -- was among the top 10 new positions taken by large hedge funds in the fourth quarter, according to Thomson Reuters Ownership data.

But it turns out that a couple of those hedge funds were also long-term shareholders before the spin-off and say they have no intention of unloading their shares. Hedge fund managers say BHS is often confused with being a housing stock and argue that it is a relatively recession-resistant, cash-flow rich bet.

"This company is not at all what people think it is," said Jerome Lande, executive vice president of New York-based hedge fund Millbrook Capital Management Inc, which owns stock in the company. "This is a very strong, consistent vehicle for generating recurring revenue and cash flow."