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Corrections Corporation of America Message Board

  • Fico5_98 Fico5_98 Dec 23, 1998 12:17 PM Flag

    Acquisition related to price drop?

    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.

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    • 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.

    • 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.

      Go PZN!

13.35-0.28(-2.05%)3:42 PMEDT