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  • flipper_58 flipper_58 Dec 17, 1999 2:58 PM Flag

    New Lows...Baby

    I've worked pretty hard on the CPV story over
    this week and have talked to one of the key analyst
    covering the company so far and CPV's CFO. The one analyst
    I talked with of a top brokerage firm was very high
    on it. If it was not so small they would bang the
    table on it.

    We both agreed it's a "investment
    grade" bond look-a-like at a 12.50% yield. CPV's leases
    are second to no one as WHC has no outstanding debt.
    A lease coverage ratio of 3 to 1 and a payout of
    only 75% of expected FFO. It's what I wanted in PZN,
    oh well.

    Everyone assures (CFO etc.) me CPV
    wouldn't think of issuing equity at these levels. The
    analyst said they would put CPV to "sell" faster than
    their head could spin if they tried. It needless to say
    would be suicide and would kill any chances of even
    trying to raise equity at such dilutive levels. CPV is
    going to have to grow internally for now even though
    they do have a few tricks up their sleeve.

    appeal to CPV is it's simplicity. After trying to figure
    out PZN's books it's a dream to see CPV's books. Real
    leases, no private subs, fair cost basis',etc.. A clean
    shop for what I've found to analyze anyway.

    think their is a slight possibility of a dividend
    increase this year as CPV focuses on getting it's stock
    price up to buy more prisons. They might push the
    envelope a bit as they have some upside room in their cash
    flow to do it. The analyst I spoke with didn't object
    if they bump it a notch to boost the share

    The real issue is investor interest. CPV is lumped
    with PZN as the same. They are very different
    structures, but the stigma is there. I think this stigma has
    made CPV a very attractive buy.

    Also not
    helping are big REIT operators like Cohen and Steers are
    sticking to the top 20 names in the REIT business these
    days. They expect more consolitations in the industry
    as there probably is too many left over from the
    REIT boom days as every Tom, Dick and Harry starting a
    REIT. The large with survive in many areas it

    With I hope to see no surprizes, I've had enough.

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