Can anyone speculated why this stock continues to decline in price despite being strongly favored by analysts. Does it have anything to do with the recent acquisition of CCA. Using marketguide I noticed that the LT debt/equity ratio is 0.47 which isn't bad. I don't know if this ratio factors in the new acquisition.
My understanding is is that PZN will absorb CCA, with CCA being a much larger company. CCA should continue business as usual, growing at a substantial rate while eliminating income taxes (I think). I own another REIT, and comparing this new REIT with the other one I own, PZN seems to be substantially undervalued. And right now, nobody is touching REIT's in general, not even with a ten foot pole. I don't usually make such bold assertions, but I wouldn't be surprised to see this PZN easily double after the dust settles, and people understand the transaction. I would hold on to this stock for at least a year. By the way, I bought in yesterday.
In addition to general dislike of REITs, this one has management, that amply demonstrated, that they are willing to put their own interests ahead of shareholders. Go to CCA thread and read posts, related to the merger. Perhaps, then, you will UNDERSTAND this transaction BETTER!
Not sure why the drop is stock price. I had a dependable lead to purchase this stock on Dec21st to get the dividend. I was told that this is a great long term stock that will pay good dividends for people who like are long term investors. Looks like money managers are getting rid of the stock, based upon the large volume moved. This could be a temporary thing, I hope. The future looks really good for privatized jails, but only time will tell.