Corrections Corp of America (CXW)

Unemployment is 10% and real unemployment is higher. More crime to come...

These people should all go to hell! I'm also going to agree with Devoish on this and say it's just a government-supported real estate company.

Ackman

Growth industry

growth and earnings are improving and they always do well in an unstable economy. States are having budget problems and can save money by renting beds from CCA. California has recently started renting beds and they are going to need a lot more over the next two years to meet a federal court mandate.

privatization - if they can do it cheaper, gov will be having to cut costs and incarceration is and has been historically on the rise...demand up, private vs fed. solution that saves $$$...good theory at least

From a purely financial standpoint it is a solid play. But there is something unsettling at looking at a rising crime rate as a chance to make profit.

The US has overbuilt its prisons even more than housing. Prison Contracts tend to run 20 years, renewable every 5. Cash strapped governments will revisit "three strikes" laws, and the potheads will be freed. Alternative sentencing to incarceration will be used. The contracts require the states to pay on a minimum number of beds. That number is lower than current use rates of 90-95%, allowing for short term losses in income. As the contracts come up for renewal, expect that minimum number to decline behind popular support for saving money.

Low relative PE, good star ranking, PEG & 09 PE still below normal - bottom fishing 5/3 picks.

With crime high, this stock is guiding lower? Can you say SELL SHORT and dont worry about cover.....this one probably wont stop falling.

Well established in Corrections. Progressive & cost conscious management. Economic hardships mean job losses. Job losses means crime increases. Crime increase means more people locked up. Fiscally strapped states will be looking at less expensive privately ran corporations to save the costs of building more bed space themselves. A good bet in the long run.

With government budgets being squezed like never before, and over 1% of our society's members in prison (and growing significantly faster than the overall population), I believe this stock is a long-haul winner. It is a sadly pragmatic way to profit on the decay of my country.

At 17.5x my 2009 EPS estimate this is not a cheap stock per se, but the haircut today makes it almost cheap. On the other hand, you don't get a much better example of a company that will grow 15-20% regardless of the economic cycle, and as folks digest today's lowered guidance and recognize that it really is a timing issue through 2008 and not foreboding any kind of permanent slowdown in their prisioner uptake, I expect the stock will recover. I also am making a bit of a market call here, as the modest upside I see in CXW over the next year would not be nearly as attractive if I felt the overall market had a ton of upside from this level. In my eyes, this is a lower risk, modest reward type of pick in a market with a high risk of decline.

Taking advantage of a drop in price caused by poor(ish) results from GEO.

I like this stock at $25. They are also a company that gets several state and federal no-compete contracts. It has been trading in a range of $25-31 for about a year now. Look for a break out to happen in the next 6 months.

This is a company who builds and runs private prisons. This saves the state money by not having to build more prisons to keep pace with overcrowding. The state pays the company a specified amount to house these prisoners. The company then contracts with different companies to manufacture products (tables and chairs for example). CXW can then use the profits to offset the cost of housing the prisoners. In some states the company can rebate the state as the prisoners have paid their own way during thier incarceration. Seems like a winning situation.

Prison management not affected by recession. 41% growth to target price.

Prisons are big business and if this stock has anything to do with the Dept. of Corrections, this will be a goldmiine!

Our prison population is only growing; and CCA seems to have a contract with INS to 'house' undocumented immigrants.