CCA, LifePoint execs sell part of holdings
Posted on November 19, 2009 at 1:37 pmRichard Seiter, chief corrections officer at Corrections Corp. of America, on Tuesday sold 4,500 shares of the company for about $113,000. Shares of CCA (Ticker: CXW) have risen about 50 percent in the past six months.
Over at LifePoint, Group President Joné Law Koford pocketed about $155,000 from the sale of almost 5,200 of her shares. Shares of the Brentwood-based hospital chain (Ticker: LPNT) are up about 14 percent since May.
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Pinnacle, America Service big gainers
Posted on November 16, 2009 at 1:13 pm
A good number of Middle Tennessee’s public companies are on track to gain about 3 percent today, but two names are outpacing them and the broader market. Shares of Pinnacle Financial Partners (Ticker: PNFP) are up some 7 percent while America Service (Ticker: ASGR) is 5.5 percent higher. Both stocks are now at their highest levels in about two weeks.
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Some Florida flak for CCA
Posted on at 10:29 amA Tampa-area business coalition is calling for changes to the contract Hernando County recently renegotiated with Corrections Corp. of America — even though CCA lowered its per diem rate more than 10 percent.
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CCA’s pipeline strong enough for higher price target
Posted on November 9, 2009 at 7:25 amAvondale Partners analyst Kevin Campbell says Corrections Corp. has the financial muscle, free cash flow and market position to add nicely to its book of business in the coming years. That has led him to raise his price target for the shares (Ticker: CXW) to $30 from $24, based on a 2011 profit estimate that is 15 percent higher than his 2009 forecast.
The company estimates that its inventory and development pipeline can add $50 million in incremental EBITDA over the long-term, with the majority of the interest and D&A expense already included in expectations. We estimate that this could add more than $0.25 in EPS at the current share count. In addition it has financial flexibility in 2009 and 2010 to take advantage of the current environment through continued development, share repurchases or debt reductions.
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California deal brings Oklahoma CCA jobs
Posted on November 5, 2009 at 7:24 amTwo days after announcing a big contract amendment in California, Corrections Corp. says it will grow the payroll at its North Fork prison by two-thirds. Look for a similar release soon about the 900-odd Golden State prisoners going to Arizona.
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America Service renews Wyoming work
Posted on October 28, 2009 at 7:07 am
Previewing the third-quarter earnings America Service Group will announce this afternoon, Avondale Partners analyst Kevin Campbell notes that the company recently renewed a $20 million contract with the state of Wyoming. As for Q3, the consensus has Brentwood-based America Service (Ticker: ASGR) earning 29 cents per share on revenue of $158 million.
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Among prison operators, CCA best long-term bet
Posted on October 19, 2009 at 7:32 amA story in this weekend’s Barron’s puts the spotlight on private prison companies. Analyst T.C. Robillard says Corrections Corp. shares (Ticker: CXW) already have priced in a lot of the pending rebound, but are the best long-term investing proposition.
CCA’s massive inventory makes it the go-to company for federal and state customers. One worry: Because it has so many beds, investors fret that a large number could go unused. Earlier this year, 11,000 were empty, but new government contracts had trimmed the total to 6,500 by summer.
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The baton passes at CCA
Posted on October 16, 2009 at 7:59 am
As of yesterday, Damon Hininger is the CEO of Corrections Corp. of America. Longtime boss John Ferguson will remain an employee — his compensation is still to be determined — and stay on the company’s board of directors and has agreed to a one-year noncompete clause that will kick in when he leaves CCA’s payroll.
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CCA facing Oklahoma cuts
Posted on October 15, 2009 at 10:39 amOklahoma’s Department of Corrections will trim its budget by 5 percent to help the state manage a shrinking budget. Corrections Corp. of America manages more than 2,000 inmate beds in the state and, all other things being equal, would stand to lose about $2 million in annual revenues.
But Kevin Campbell at Avondale Partners says CCA and competitor GEO Group “will be able to offset these cuts with changes in the scope of services provided or increased inmates.” Shares of the Nashville company (Ticker: CXW) are down about 0.6 percent this morning.
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CCA goes grassroots in Georgia
Posted on October 14, 2009 at 8:01 amRepresentatives of Corrections Corp. of America helped residents of Jenkins County, Ga., lobby for the Nashville company, one of a number of firms in the running for a 1,000-bed prison that is seen as a crucial job generator in a high-unemployment region.
SEE ALSO: A release from CCA announcing its willingness to build in the area — in the spring of 1999.
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CCA upgraded by TheStreet.com
Posted on October 8, 2009 at 12:03 pmInvestors should buy shares of Corrections Corp. of America, says the ratings model devised by TheStreet.com. CCA (Ticker: CXW) is up about 45 percent this year.
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CCA laying off 120 in Minnesota
Posted on October 5, 2009 at 3:30 pmThe Nashville-based prison manager has cutting more than half of the payroll at its Prairie Correctional Facility in Appleton, Minn., after losing a State of Washington contract. Earlier this year, the company (Ticker: CXW) had avoided layoffs by trimming work hours.
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Analyst: Buy America Service on the dips
Posted on at 8:11 amAvondale Partners analyst Kevin Campbell says investors shouldn’t worry about the company’s decision not to try to renew its $18 million-a-year contract with Vermont. There are plenty of other growth avenues out there, he wrote on Friday — including in Arizona and Tennessee, where officials are preparing to hand out contracts totaling more than $100 million.
Campbell has tweaked his EPS estimates and lowered his price target from $20 to $19 to account for the Vermont move, but says investors should take advantage of the shares’ (Ticker: ASGR) recent weakness to jump in or add to their stakes.
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Vermont officials: Good riddance to Prison Health
Posted on October 1, 2009 at 1:00 pmPrison Health Services will not be missed in Vermont, where the corrections commissioner is pointing out the coincidence of the company saying it won’t bid for a new contract after an inmate died in custody. Prison Health is a unit of America Service Group, whose shares (Ticker: ASGR) are down along with the rest of the market today.
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CCA set to grow into higher valuation
Posted on September 21, 2009 at 8:22 am
Analyst T.C. Robillard, who this summer joined Signal Hill Capital from Bank of America, has begun covering shares of Corrections Corp. of America as well as its main rivals, Geo Group and Cornell, with ‘buy’ ratings. He cites a “classic supply-demand imbalance” as the main growth drivers for the companies, but adds that investors should treat their stocks as buy-and-hold plays rather than looking for short-term catalysts.
Here are some of Robillard’s thoughts specific to CCA:
Corrections Corp., given it owns 71% of its bed supply, is able to generate significant incremental margins (up to 80%) as it fills its remaining capacity… We do not believe this is an unrealistic assumption given our supply-demand balance expectations over the next several years.
…
California will be the single largest risk to Corrections Corp.’s earnings stream in the coming quarters given: (1) this customer has gone from 0% to 10% of revenues within the last 6 quarters; (2) it has had, and will likely continue to have, the biggest budget gap of any state; and (3) its political environment is the most opaque in the country.
…
The stock should be able to push back to historical averages (18-19x forward EPS) once budget concerns subside due to the strong secular industry trends.
For now, Robillard says CCA shares (Ticker: CXW) should trade around $24. They closed at $22.62 on Friday.
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