Corrections Corporation of America, together with its subsidiaries, owns and operates privatized correctional and detention facilities in the United States. It owns, operates, and manages prisons and other correctional facilities; and provides inmate residential and prisoner transportation services for governmental agencies. The company also offers various rehabilitation and educational programs, including basic education, religious services, life skills and employment training, and substance abuse treatment, as well as food services, work and recreational programs, and healthcare services, such as medical, dental, and mental health services. In addition, it leases its facilities to third-party operators. The company serves federal, state, and local correctional and detention authorities. As of December 31, 2012, the company owned and managed 47 correctional and detention facilities; and managed 20 correctional and detention facilities, which it did not own. Corrections Corporation of America was founded in 1983 and is based in Nashville, Tennessee.
Local prison operator’s stock plummets following DOJ announcement http://www.bizjournals.com/southflo...ng-local-prison-operators-stock-plummets.html Geo Group, the world’s second-largest operator of private prisons, took a hit along with the rest of the industry Thursday following a U.S. Department of Justice announcement that it plans to end its use of private prisons. Shares of the Boca Raton-based company (NYSE: GEO) fell more than 40 percent in the hour after the DOJ made its announcement. At 11:30 a.m., its stock was priced at about $32.44 a share, and by 12:44 p.m., the price had fallen to $18.90. Other industry peers like the Tennessee-based Corrections Corp. of America (NYSE: CXW) reported huge losses. CXW had fallen more than 50 percent as of 12:30 p.m. on Thursday.
Im actually glad to see the DOJ make this move. For profit prisons caused way too much corruption with lawmakers and judges. People getting paid under the table, bribes and more so that the prisons can stay full.
Apparently CXW could be a big overreaction and oversold here in the teens. Possible trading opportunity tomorrow.
This stock CXW along with GEO came on my radar as an income investor about 2 years ago. Both have (had) decent fundamentals with an over 5% dividend yield that made it quite appealing to an income investor. THANKFULLY I never bought in. The one thing that kept me fearful of investing in them was that I do not like companies that rely on third party contracts as their primary business. Today's announcement was validation of my fear. Had I got into them they would have been long term portions of my portfolio so I likely would have still been holding them. REIT's are good investments for income but just like CEF's they are very tricky in evaluating them for long term holding.
