Corrections Corp of America (NYSE:CXW)

CXW has several trends working in their favor. An Increasing population means more prisoners. The last census showed most of the growth was in the south and west where CXW has most of its operations. Also, budget conscious governments will look to private prisons to save money. They also say they pay unemployment taxes which will decrease if the number of claims decrease which should happen eventually. Add that to the already overpopulated prisons and CXW looks like a buy.

Basically part of a duopoly--the other being GEO, Except CCA's got excess beds in its inventory waiting to capitalize on the problems states are facing, namely prison overcrowding and pension problems.

Private prisons are a great way to fix budget defecits (because they cost less to build and operate), create jobs, solve the problem of overfilled public prisons, and according to the Department of Justice improve the quality of prisons. CXW is the best of all the companies, since it is the biggest company, because it provides the best quality care and because they have the highest profit margin. I wrote a whole article about CXW, and why i reccomend it as a buy on my blog. Feel free to read the article by clicking this link: http://teenstockadvisor.wordpress.com/2010/11/30/corrections-corporation-of-america-cxw/

increased busines

Something about this industry rubs me the wrong way. Somehow this is worse than war profiteering since these companies profit from causing pain, misery, and starvation.

growing prison population

This is not just a company that owns private prisons, but also the owner of TransCor, the largest prisoner transport company in the U.S. Do you realize how many fugitivies get picked up hundreds and thousands of miles from the area of the original crime? How do you think they get back to that place after being apprehended?

Because you guys said so...

This is a macro bet; CXW is the largest public prison operator in the US and we have a huge backlog in new prisons. Given the budget troubles of virtually every state in the union bad news may be in the cards in the short term for this company, but it has already been hit hard and is attractively valued for a long term outperform.

Heck, a lot of my friends are in prison.

These states need the extra beds, they are just trying to hold off spending the money. Prison over population lead to serious problems, including riots.

State governments have no money to fund the construction of new prisons. State governments will continue with more frequency to outsource the construction, supervision and maintenance of facilities to outside companies to avoid having to come up with the large lump sum of funds up front. However they will still pay long and healthy contracts to whoever manages these things and CXW is one of the best

Corrections corp will benefit from outsourcing. They are also the best company in prison makers. they will continue to benifit from new prisons in the next 3-5 years

sa

Outsourcing of prisons is a good efficient means to cutting costs. National.

I didn't even realise there were private prisons! What a wonderful arena for capitalists! Take on the dirtiest job that the public sector doesn't want to do, do it cheaper and better (CXW builds its institutions more quickly and for less money then the government does) and you have a winner. Governments relish control, but only if they think there is more potential upside than downside - prisons don't fit that bill. People talk about potential government interference but I don't see it.
The only realistic downside I can see if is states go bust and cannot fund private prisons. Other than that - in good times CXW will do it cheaper anyway; and in bad times when governments have no excess money they will be even more desperate to outsource their obligations to CXW.
Other objections centre around bad publicity for private prisons, but hey - public ones get that anyway, and think about it - if you're a politician would you rather have to field questions about a poorly performing prison under your control, or just blame a private contractor? In the end money talks, and politicians would rather be able to deflect the blame than have to do the job properly. Sad but true...
Ethical objections are a nonsense, and nothing to do with making a buck, so I won't even waste my breath on them here...
I love this pick.

Private prisons. I’ve been watching this market, on and off, since 2007. There is a glut of private companies, including GEO Group (GEO), Corrections Corp. of America (CXW), Cornell Co. (CRN), Avalon Correctional Services Inc. (CITY.PK) and Civigenics, operating as a subsidiary of Community Education Centers, Inc. (CEC) in this overpopulated market. A US Census report said the prison population was growing at an annual rate of 4% rather than the 13% predicted by the Pew Charitable Trusts earlier this year. In 2007, Barron's said the lofty valuations of these companies were reasonable. With earnings growing at an annual pace of 20%, Barron's said that Corrections Corp. shares could jump to $30 from their current $27; GEO could rise to $35 from $28.50 as earnings rise more than 25%; and Cornell with an earnings rebound to an estimated $1.27/share next year from $0.82 this year could shoot up 40% from the current $26. Today the share value for these companies is $20.61, $19.17 and $20.19 respectively. The largest of these companies by both market cap and revenues is Corrections Corp. of America, which is based in Nashville, Tennessee. The next largest company is Geo Group Inc. based in Boca Raton, Florida. It has facilities in the United States, Australia, Canada, South Africa, and the U.K. Cornell Companies Inc. is a Houston, Texas company, which in addition to providing detention services, also provides educational services to detainees. Avalon Correctional Services Inc. is a micro-cap stock which trades on the pink sheets, and should be considered very speculative. It operates correctional facilities in Oklahoma, Texas, and Colorado. Civigenics, a unit of New Jersey-based Community Education Centers, Inc. is a competitor, too. Many states, including Idaho, Hawaii and Kentucky, have removed prisoners from the custody of private prisons based on budget cuts and contractor misconduct. California, a leader among entities with the highest number of offenders incarcerated in private facilities, is feeling significant fiscal pain at present. The state currently has about 10,500 prisoners incarcerated in private prisons and is considering moving up to 5,000 more into them. There is considerable angst about California’s relationship with private prisons, CCA in particular, due to a lack of competitive bidding. Read Capitol Weekly’s recent article for more details. There has been much press about the poor quality of offender care and security in these facilities. Due to increased fees for medical and psychiatric care, issues pertaining to overcrowding as a result of more punitive criminal justice policy, and high wages due to overtime, prisons are becoming an increased drain on state budgets. In 2001, the U.S. Bureau of Justice Assistance found that rather than the projected 20 percent savings oft-cited by private prison operators, the average savings from privatization was only about 1 percent. Most of that was achieved through lower labor costs. The study also found private facilities' small savings result from having staffing levels about 15 percent lower than in public facilities. This result in less security and more opportunity by ‘bad actor’ prison guards engaged in misconduct.

http://www.businessinsider.com/bill-ackman-is-buying-americas-largest-private-prison-company-2009-10

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.