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Corrections Corporation of America Message Board

  • gmodica gmodica Apr 16, 1999 5:18 AM Flag

    reasons to (?) believe

    Today's talk has given 6 reasons for the slump in
    PZN:

    Macro:
    REITs are out of favor
    small/mid-cap groups are
    underperforming the market and failing to attract capital to
    their issues

    Specific:
    Bad press
    Ambiguity
    about the future of
    privatization
    Confusion/dissatisfaction of stockholders about the changeover
    Possible
    IRS review of the REIT status

    That's quite a
    slew of reasons. I'm looking for a bottom and will
    perhaps double my position. Yield of 13.38% (without the
    special dividends or any regular dividend growth) and
    moving in the direction of (and ever closer to) it's
    52-week low while showing good fundamentals - isn't this
    a VALUE play?

    I do remember Doc said $50 by
    year-end 99 and I wonder.

    SortNewest  |  Oldest  |  Most Replied Expand all replies
    • to add "pissed off union struggling to stay alive".

    • If this stock is going to pay a special dividend
      in December of ~$2, the price is going to drop at
      LEAST $2 immediately thereafter.

      In reality,
      stocks drop MORE after the ex-dividend date as
      shareholders hold for the dividend (or bought for the
      dividend) and dump. There is a highly predictable price
      decline coming in December.

      AND where does the
      money for this dividend come from? If this company has
      to borrow or issue equity to pay that dividend, then
      we are left with an entity with higher leverage or
      dilution and thus it may be less attractive
      thereafter.

      These uncertainties are abhorent to the market. And
      they appear fully justified.

      I suspect if PZN
      pays a $4.50 dividend this year as estimated
      previously on this board, the price will be $10 thereafter,
      when all the fundamentals decline. To overcome these
      disadvantages, the company would have to show a significant
      earnings improvement.

    • Tonight (Friday night) on "Wall Street Week" with
      Louis Rukeyser the topic for this week is scheduled to
      be "The Real Estate Scene" which, I am assuming
      refers to REITs.

      www.multexinvestor.com is a
      website where investors can download analyst's reports on
      any stock for a fee. The fees can range from $5
      (Standard & Poor's 5-page report) to $75. Most of the
      reports that are available cost $10 - $20. I would highly
      recommend this website. I've learned a great deal about the
      prospects for PZN by downloading a few of these reports - I
      now feel I have a much better understanding of both
      the positives and negatives (risks) of PZN from
      reading some of these reports. I found the Standard &
      Poor's report ($5) to be very informative and also found
      a report by Wheat First Union ($10) which was dated
      1/19/99 to be quite informative as well......these
      reports lay out the positive possibilities of PZN as well
      as the risks associated with owning the
      stock....solid information provided.....

 
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