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Corrections Corporation of America Message Board

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  • newMK newMK Nov 20, 2001 10:33 PM Flag

    Why dropping so continuously...

    Actually,I've been meaning to post some of this for quite some time. I still follow this stock daily - mostly for sentimental reasons.
    One of the things I always look at is the Yahoo "big 1 day" chart. When the stock started it's climb from 13 or so, it seemed that there was usually a relatively big block traded right at the beginning or end of the day - many times it was 25,000 shares, more recently 10,000 or 15,000. And the block was typically at the day's high. I interpret that as someone accumulating with enough volume and frequency to drive up the price. The stock had one of its biggest volume days when it hit 18+, a 52 week high. Since then the volume tapered off, and the price slid, until today, when volume was the greatest since the 18+ day, and there were some big blocks again.

    So, my hunch is that somebody continues to accumulate it. A stock like this, with little or no coverage, isn't likely have much activity unless one or a few buyers think it's a good buy. That's not necessarily a ringing endorsement of the stock, but it is interesting if true.

    There are others (the General, his Oracle, Flipper, etc.) who understand the technical analysis much better than I do. I'm curious what they think.

    Overall, I'm in princessalouie's camp: it's starting to show some promise, but still has a long way to go. They can grow earnings by filling empty beds, refinancing and managing well. But they won't have capital to add facilities for a long time. And what they gain in Federal contracts, they may lose in state contracts. Because of the recession,there should be less wage pressure, more crime and more states looking to save money (although I don't know if the latter will help or hurt).

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    • Technical indicator. That climb started just around the time when yours truly posted again, after significant absence. Could that be the REASON?

      On a different matter, I am saddened you are only following this stock for "sentimental" reasons. By itself it's prebably a bullish signal? What do you think, my friend?:-)))


    • I agree with your analysis for the most part. I don't think investors should buy CXW as a growth story but rather as a de-leveraging story. Upon completion of a long term bank financing (very easily done) and the expiration of some interest rate hedging contracts that are currently inflating interest expense, this company can easily generate $150 million in annual free cash flow to reduce debt. You do that for a year or two and this stock will be well on its way to $50.00.

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