prison sector has been down for the past 12-24 months is about 90% related to the WallStreet problems from PZN. PZN's going into/out of REIT, etc. has taken everyone's eye off the ball as to why they invested in this industry to start with (i.e. strong fundamentals with very visable earnings growth of 20+% for many years, etc.). The other 10% has been from bad press, which although there are escapes in public prisons too, you only seem to hear about the ones from a private facility.
I own, and have for along time, almost all the private corrections stocks. We have a nice oppurtunity now with everyone flying into Tech (although that's a good place to be, but someday that bubble will burst), and they've let this sector get beaten down way below where they should be.
IMHO, the ranking of the best stocks to own are the following:
#1 -- CRN: CRN looks to have the best all around management team in the business. They have a very sharp business, financial and operational team, and alot of talent in the field. They also cover a broader span of revenues through their 3 divisions (prisons, halfway houses and juveniles). CRN is just about the only one that has given extremely strong EPS growth without any surprise charges ever year or so. CRN is also the only one who owns a large portfolio of real estate, but they need to sell it to get rid of some of their debt (I think they are/have been working on this).
#2 -- WHC: WHC has a large market share being the #2 in the business, and seems to have alot of resources in their parent company (WAK). They have a strong international presence. The main complaint with WHC is that they seem to low-ball new projects, which the #2 player shouldn't be doing, and while they have some very talented people, some (not all by any means) of their top exec's are not preceived to be that strong.
#3 -- CSCQ: They also have a broad revenue stream and have been beaten down like the rest. However, these guys always seem to come up with a "one-time" charge every year or two, and their top exec's don't have a good reputation in many circles. However, they do have alot of contracts...they just need to put more power into the field personnel to improve programs,etc.
#4 -- PZN: it seems odd to put the biggest as last, and although their #1 market position is very compelling, their top management team has lost all credibility with everyone. The new investor group is interesting, but still too many unknowns. There is alot of upside here, but the lawsuits that are bound to come from their actions will be a distraction.
Basically, everyone in this group is beaten down far below where they should be (so you probably won't go wrong with any of them). However, my ranking of the above is, IMHO, the choice of where to put the most of your money respectively, because to make the "real money", it will be the top companies above that will really break out of the pack .... and when this industry does come back, I think it will be in a big way.
If you're willing to weather some ups and downs, these are great investments for both the short term and long term.