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Corrections Corporation of America Message Board

  • lmtrack lmtrack Aug 17, 1999 3:18 PM Flag

    a different kind of investment now?

    check my recap and correct where
    indicated:
    With 100M bonds at 12.25, down from 400M (due to
    excess cost of funds), LOC expanded from 650M to 1000M
    (at the price of 'enhanced' rates), (some) improved
    transparency wrt CCA, the last (.55+.05) dividend paid in
    cash, the yapping law-hounds still chasing their tails
    in the kennel, and Mike Q. replacing the old guard
    at OPCO, the most interesting remaining question (to
    me) remains whether the 'Strategic Investor' will be
    brought on, or whether the 'special' will be in some
    non-cash (pick one from column A or one from column B)
    form. Since, for all intents and purposes, Doc has the
    draft pick in his pocket, it seems only reasonable that
    he will not bring on board anyone likely to be
    sufficiently assertive to cause him (more) grief down the
    road. This is why I believe that opting for the
    non-cash special is a bigger negative than many might
    suppose. It's really important to get a strong, confident,
    and knowledgeable voice added to the chorus.
    Dissonance may 'jazz' up the board, and keep Doc's attention
    focused on foresight: it's isn't a pure case of 'what
    have you done for us lately', but he does seem to have
    been resting on his (arguably well-deserved) laurels
    more than we can afford.

    Does this make PZN
    more appealing to the buy-it-and-park-it IRA
    investors, who can easily afford a 2, 3, or even 4 year
    timeframe of longer-term rebuilding while collecting
    (tax-free) returns?

    Even with a dividend cut to 1.35,
    and common appreciation to 13.50, you have 10% yield
    plus capital appreciation. Are these numbers
    conservative enough to make a tradeoff of decreased
    Beta/decreased yield scale non-linearly? Or are there enough
    buyers still out there in the high yield/high Beta camp?
    The clear decrease in ADV could be taken as an
    indication that PZN is somew

    SortNewest  |  Oldest  |  Most Replied Expand all replies
    • PZN is somewhat 'shopped out' by the traders.
      More investors, fewer traders should stablize price,
      and replace some of the 20/20 hindsight with patience
      and calm confidence. Am I living in Disneyland, or is
      this a realistic possibilty?

      • 2 Replies to lmtrack
      • I think your analysis is right on, especially the
        conjecture concerning how the whole Strategic Investor thing
        might play out. I've expressed similar concerns in
        recents posts.

        One correction though, I've heard
        from several people qualified to know that to remain
        within the REIT requirements, PZN can't lower the
        dividend any lower than ~$1.90-$2.00.

        I think
        there's a good chance that we will in effect be holding a
        junk bond disguised as a stock until more things
        become clear with the SI, success in getting the new biz
        and a couple of quarters of earnings.

    • [\quote on]
      numbers conservative enough to
      make a tradeoff of decreased Beta/decreased yield
      scale non-linearly
      [\quote off]
      Okay, now one
      syllable at a time for us slow folks: are you saying that
      the 'decreased Beta' (which I take to mean less
      risk/less price volatility/greater security) outweighs the
      'decreased yield' i.e.: cut-down dividends?
      I don't buy
      the argument that the small and mostly symbolic
      events of the last 30-60 days even remotely improve
      investor confidence so much that the 'Beta' goes down
      measurably. Actually, as I understand it, 'Beta' is a TA
      calculation based on (essentially) objective numbers of
      actual past performance, not forward-looking estimates,
      and certainly not any 'market pyschology' measures,
      if there are any effective measures for such
      things.
      To answer your last question: yes, you are living in
      Disneyland (not FrontierLand or TomorrowLand, but
      FantasyLand!) if you think that PZN is 'n' times less risky
      than on 5/12/99, where 'n' is greater than the ratio
      of old divs to new, with capital depreciation
      factored in to represent the hit taken on the price.

    • I would also like to see a dividend reduction,
      which I believe I've mentioned in prior posts. A good
      counter-argument was made (I believe by MK) that while a dividend
      reduction would be the best financial move, it might be
      greeted negatively (for a while) for investors,
      ESPECIALLY if the magnititude of the cut was too small, ie.
      if you can only cut from .55 to .53, don't do
      it.

      One other point though, I'm assuming the earlier
      mentioned dividend floor levels did not take into account
      the possible tax law change allowing 90% payout
      instead of 95%.

      As I've said before, at this level
      with our share price, the big dividend is a big red
      flag to most potential investors.

    • An Inmate while at a Jackson Tennessee Hospital
      Guarded by CCA employees escapes after kicking a CCa
      guard in the groin and taking his weapon. The CCa
      housed Inmate then flees the hospital and conducts a
      carjacking , with an hostage, then proceded with local,
      tennessee highway patrol, and CCA officals chasing.The
      vehicle proceded west on I-40 toward memphis where the
      vehicle caught fire, The escapee fled on foot leaving his
      hostage, and the 38 cal. rev. taken from the CCA guard.
      The 5' 4" 130 lb. Inmate was later captured in an
      abonded house near memphis.The entire matter is under
      investigation.



      This is the kind of security and public protection CCA
      provides to the public. I bet the people of western
      Tennessee can sleep well knowing their tax dollars are
      wasted on this poor excuse of security.

    • Unless the IRA you're parking it in is a Roth IRA, the returns your investment earns, whether through income or appreciation, are not (ultimately) tax-free, just tax-deferred.

      • 1 Reply to GenJackripper
      • I want to make three points in rebuttal:

        1
        - Thank you.
        2 - You're absolutely right.
        3 -
        I have tried to read just about everything on this
        board, good bad, or indifferent, and NOTHING I have seen
        you post qualifies as a 'minor point'. The least of
        your posts exceeds the most of most of (huh?) every
        one elses.

        (now how would that go in english,
        I wonder?)

        There has been just too much
        sunshine and roses here lately, so I hope you will forgive
        my rude inaccruate and delibrately misleading
        subject line (not to mention my tangle-finged
        mis-typings)

    • <EOM>

    • Escapees Still On The Run - (ORLANDO) -- A saw
      the size of a fingernail file is being blamed for
      Monday's break from
      the Orange County Jail. The
      three-inch hacksaw was able to cut through an escape proof
      steel bar. No one reported hearing
      anything when a
      two-by-five foot pane of safety glass crashed and shattered,
      falling three stories to the ground. Somehow the
      small
      saw was smuggled inside and somehow a friend received
      word to be waiting in a car. One escapee Robert
      Fitzgerald
      has only been in a cell two days... the other, a
      convicted bank robber... Michael LaVelle had been there ten
      days.


      http://dailynews.yahoo.com/headlines/local/state/florida/story.html?s=v/rs/19990
      817/fl/index_1.html#6



      You Call This A Jail? - (FORKS) -- Officials at the
      Olympic Corrections Center near the town of Forks are
      reporting
      another prison break, the fifth inmate to escape from the
      Olympic Peninsula minimum-security facility in the past
      two weeks.
      Avram Morar was reportedly doing time
      for second-degree burglary and bail jumping. Morar
      was last spotted yesterday near
      a Forest Service
      road off U-S Highway-one-oh-one. Three others escapees
      from the prison also remain at large.


      http://dailynews.yahoo.com/headlines/local/state/washington/story.html?s=v/rs/19
      990810/wa/index_1.html#5

    • See Tennessean news paper
      Jackson sun, news
      paper
      Memphid Commerical appeal

      5' 4" 130 lb.
      Kicks CCA Employee in the groin, takes his weapon,
      flees the hospital carjacks, and takes the operator of
      the vehicle hostage, Procedes to enter Interstate
      I-40 west bound,Just before reaching Memphis Tn. the
      vehicle develops a problem, catches fire. The Inmate
      flees on foot, and was later captured inside an abonded
      house near memphis.

      There goes the rest of the
      credit line, the state, and county, will have to be paid
      for their servicies in the capture of the Inmate. The
      Ladies car will have to be replaced, and the law suit
      which follows should just about take care of the 350mm
      credit extention.

    • No point to be made, just fowarding some information.

    • "There goes the rest of the credit line, the
      state, and county, will have to be paid for their
      servicies in the capture of the Inmate."

      Doubt it,
      very seriously.


      "The Ladies car will have
      to be replaced, and the law suit which follows
      should just about take care of the 350mm credit
      extention."

      Insurance if needed.

      And which
      branch of afscme do you work with/for?

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