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# Corrections Corporation of America Message Board

• flipper_58 flipper_58 Mar 25, 1999 1:24 PM Flag

## Value verses Momentum Investing...JMHO

Momentum investing means "buy high, sell higher".
A fun game and one that's worked well as the
liquidity factors mean you don't need to worry about
valuations. You just need to worry about
liquidity.

Value Investing means "buy low and sell high". Not in
favor now.

Here's more PZN numbers to absorb in

The highs, lows and
current numbers in the following ratios since PZN's
inception.

P/E 7 - 26 Present 7.7
Price to Book .6 - 1.9
Present .7
Price to Cash Flow 6.8 - 25.4 Present 7.7

Price to Sales 4.7 - 34.3 Present 24.47

How do
you define low?
IMO...if you can buy a company for
20% down with the rest at 9% debt and clearly make
money...that's the low.

110M shares out@\$17.50=\$1.925B
price tag.
20%equity down=\$385MM with \$1.54B in
debt.
Annual debt service=\$139MM
Net revenue @\$2.50
share=\$275MM

Your ROI on you \$385MM investment=35%/year
min.(\$275MM-debt service of \$139MM).

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• Flipper
I have some problem with the
"P/E 7 - 26 Present 7.7

Price to Cash Flow 6.8 - 25.4 Present 7.7
Price to
Sales 4.7 - 34.3 Present 24.47 "
If I calculate it
correctly this business margins are north of 300%.
Microsoft margins pale comparativly. Am I missing
someting?

PS I wrote similar message before and I thought that
I posted it. I looked for it and could not find it.
If it shows up twice ingore one of them

• Flipper I have some problem with the arithmetic.
How can cash flow and earning be higher than sales?
Earnings are sales minus all cost of sales, expenses,
interest and taxes. In any normal business a person that
comes up with such a creative accounting would be a
guest at their facility instead working for them.

• This is an old adage that I used to tell my sons
constantly. Unfortunately, I had forgotten what I told them
when I bought my last 1k shares of PZN @20 3/16. The
facts are all on the side of PZN when it comes to
evaluating it as a good investment. Unfortunately, attitudes
seem to be totally turned in the other direction. As a
stockholder, I'm very much for PZN investing some money to
improve it's image with investors. If the facts are
straight about the value of PZN as an investment, then the
problem is definitely investor attitude. I believe that
PZN has a good story to tell and I hope they will
begin to tell it.

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