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Corrections Corporation of America Message Board

  • avi29 avi29 Oct 22, 1999 8:35 AM Flag

    Some Thoughts

    I am trying to determine how much of PZN's stock
    price decline is company specific, and how much is
    directly related to the broad sell-off in REIT stocks. If
    you look at any REIT index or mutual fund, you will
    see that the 10%-20% loss in PZN over the past few
    months (depending upon the exact time period) is very
    comparable to the performance of the industry as a
    whole.

    If PZN is just being sold off with the rest of the
    REITs, then I think it is a bargain. The company
    specific issues are what worries me greatly...

    I am
    not that knowledgeable about this company, so I am
    hoping someone can respond and shed some light on the
    following two quesitons: 1) How strong is the possibility
    that PZN will not pay the special dividend, in cash,
    by the end of the year? And, 2) If the special
    dividend is not paid, in cash, what do you expect will
    happen to the stock?

    Thanks in advance.

    SortNewest  |  Oldest  |  Most Replied Expand all replies
    • I did a little back testing of my own. If you
      were fortunate enough to have bought PZN on Nov 1 (@
      $23.125) and sold on April 30th (@ $19.5) you would have
      lost ONLY 15.7% of your wealth (the "B" period) but if
      you had the misfortune to purchase PZN on May 1 at
      $19.8125 and sell today at $9.625 (the "A" period)you
      would have lost 51.4% of your wealth.

      So, I
      guess with the "B" period coming Monday, I'll double
      down on PZN in hopes of only losing 15.7% over the
      next six months. PLEASE, someone send me a reminder to
      Sell on May 1, 2000. Assuming of course there is
      anything to sell by then.

    • a most complete write up per usual.

    • IN SPADES.

      Lurkers aquainted with Yale
      Hirsch's Stock Trader's Almanac will not find your posting
      a revelation, but for those who are unaquainted
      with the stock market's patterns of behavior, this
      could be something of an eye opener.

      If you
      consider the stock market's performance, as measured by
      the Dow Jones Industrial Average (DJIA) or the
      Standard & Poors Composite Index (familiarly referred to
      as the S&P 500), and you consider these respective
      indexes' performances over the following 6-month
      periods:

      A. May 1st of a given calendar year through October
      31st of the same calendar year,

      and you compare
      it to:

      B. November 1st (of the same calendar
      year as in "A," above) through April 30th of the
      proximate succeeding calendar year,

      the difference,
      over time, has been significant, if not downright
      dramatic.

      Although the 2000 Stock Trader's Almanac is due to begin
      shipping in November/December, the General took the
      liberty of calc'ing what it should tell you (and even a
      possibly surprising look ahead as to what the 2001 Stock
      Trader's Almanac may reveal in a year from now).

      A
      couple of cases in point in the 49 years reckoned from
      1950.

      1. The DJIA has gained about five times as many
      points during the "B" periods than it has during the "A"
      periods.

      2. Had there been an S&P 500 Index Fund around in
      1950 (the General doesn't believe there was) that you
      could've invested in but ONLY for the period of EITHER "A"
      OR "B," and you neglect any management fees,
      commissions, withdrawal penalties, or charges associated
      therewith, as of the end of 4/30/99, here's what an initial
      $10,000.00 investment would've amounted to in those 49 years
      and the CAGR it calc's to (shown
      parenthetically):

      PERIOD "A": $25,690 (1.94%)
      PERIOD "B": $346,215
      (7.50%)

      With only 3 more trading days left to finish Period
      "A" for 1999 (the first half of the 50th year
      comparison since 1950), the S&P 500 is down 53.27 points or
      -4.0% from where it began a/o 4/30/99's close @
      1335.18. If it should finish in the red by at least -0.1%,
      it will be the first time* it will have done so in
      nine years (since 1990's "recession time" when it was
      a -8.1% performer).

      * If you want to split
      hairs, last year's (1998's) "A" period was down 0.15
      points or a -0.013492242%.

    • to buy stocks, at the end of October. General
      probably remembers the statistics but the differences on
      returns from Nov to April versus May to Nov (I believe
      that about the time frame) is quite
      powerful.

      Most chartist I survey do feel this sell off has not
      completed itself yet though.

    • Anyone notice whc & cpv making new lows -- what do you think is going on? Maybe what flipper said -- mutual funds getting rid of losers.

    • Seems like a simple, logical solution. Probably would need the bank to OK it but that should be automatic.

    • Why not just declare the dividend and have the SI buy-in after the record date but before the payable date?

    • the end of this month. Every wonder why October
      is always the scariest month....booo. Why? In order
      to have all their accounting straight for year end
      capital gains distributions.

      They will difinitely
      be dumping losers again I'd think to off set gains
      they have taking again this year to lower year end
      capital gains distributions. They obviously like to lower
      the distributions because it allows them to retain
      more money to collect more fees on.

      Thought
      that might be on interest....according to a pal that
      covers a bunch of mutual funds.

    • You're exactly right. That would clearly be the
      way to structure the SI's entrance into this tangled
      web, AND pay the SI in cash. If there really are a
      handful of people who want in on this deal if they can
      avoid being paid the special dividend.

    • The SI doesn't want the Special Dividend AT ALL
      and I wonder if the deal couldn't be structured so
      that he misses it. Assuming PZN has the liquidity (or
      could draw on their credit line) they could pay the
      special dividend right before receiving the $100 mm from
      the SI. As long as it's structured properly, the bank
      shouldn't care whether or not the SI gets the special.


      Am I missing something?

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