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The GEO Group, Inc. Message Board

investorgroup 19 posts  |  Last Activity: May 12, 2000 3:47 PM Member since: Jul 20, 1999
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  • Reply to

    re: annual report

    by stinkinrose_2000 May 12, 2000 11:56 AM
    investorgroup investorgroup May 12, 2000 3:47 PM Flag

    to stikninrose2000, There is one shining good
    example to look at. I invest in most of the corrections
    stocks, and was surprised to see that most of them took
    bonuses in 1999 in spite of dropping stock prices. The
    one EXCEPTION to this was CRN, which looks like the
    only one of the companies consistently growing EPS
    without any surprises. Even though CRN posted 30 or 40%
    EPS growth, NOT A SINGLE OFFICER TOOK A BONUS IN
    1999!!! It's good to see a business-minded good company
    that puts itself with its shareholders.
    While I
    like most stocks in this industry at these prices,
    that is why I hold most of my corrections stocks in
    CRN.

  • Reply to

    If Crants...

    by Durangogold Dec 27, 1999 4:56 PM
    investorgroup investorgroup Jan 14, 2000 11:59 PM Flag

    prison sector has been down for the past 12-24
    months is about 90% related to the WallStreet problems
    from PZN. PZN's going into/out of REIT, etc. has taken
    everyone's eye off the ball as to why they invested in this
    industry to start with (i.e. strong fundamentals with very
    visable earnings growth of 20+% for many years, etc.).
    The other 10% has been from bad press, which although
    there are escapes in public prisons too, you only seem
    to hear about the ones from a private
    facility.

    I own, and have for along time, almost all the
    private corrections stocks. We have a nice oppurtunity
    now with everyone flying into Tech (although that's a
    good place to be, but someday that bubble will burst),
    and they've let this sector get beaten down way below
    where they should be.

    IMHO, the ranking of the
    best stocks to own are the following:

    #1 --
    CRN: CRN looks to have the best all around management
    team in the business. They have a very sharp business,
    financial and operational team, and alot of talent in the
    field. They also cover a broader span of revenues
    through their 3 divisions (prisons, halfway houses and
    juveniles). CRN is just about the only one that has given
    extremely strong EPS growth without any surprise charges
    ever year or so. CRN is also the only one who owns a
    large portfolio of real estate, but they need to sell
    it to get rid of some of their debt (I think they
    are/have been working on this).

    #2 -- WHC: WHC has
    a large market share being the #2 in the business,
    and seems to have alot of resources in their parent
    company (WAK). They have a strong international presence.
    The main complaint with WHC is that they seem to
    low-ball new projects, which the #2 player shouldn't be
    doing, and while they have some very talented people,
    some (not all by any means) of their top exec's are
    not preceived to be that strong.

    #3 -- CSCQ:
    They also have a broad revenue stream and have been
    beaten down like the rest. However, these guys always
    seem to come up with a "one-time" charge every year or
    two, and their top exec's don't have a good reputation
    in many circles. However, they do have alot of
    contracts...they just need to put more power into the field
    personnel to improve programs,etc.

    #4 -- PZN: it
    seems odd to put the biggest as last, and although
    their #1 market position is very compelling, their top
    management team has lost all credibility with everyone. The
    new investor group is interesting, but still too many
    unknowns. There is alot of upside here, but the lawsuits
    that are bound to come from their actions will be a
    distraction.


    Basically, everyone in this group is beaten down far below
    where they should be (so you probably won't go wrong
    with any of them). However, my ranking of the above
    is, IMHO, the choice of where to put the most of your
    money respectively, because to make the "real money",
    it will be the top companies above that will really
    break out of the pack .... and when this industry does
    come back, I think it will be in a big way.

    If
    you're willing to weather some ups and downs, these are
    great investments for both the short term and long
    term.

    Good Luck.

  • investorgroup by investorgroup Jan 8, 2000 11:14 PM Flag

    WHC lowered its fiscal 2000 EPS. Does anyone have any information to know if this is true, and if it is, what the details/reasons were?

    Thanks for any infomation.

  • Reply to

    New Lows...Baby

    by Easily_Confused Dec 9, 1999 4:59 PM
    investorgroup investorgroup Dec 29, 1999 10:23 PM Flag

    is not a great state for the privates, however, I
    disagree with your comment that the regulatory bodies are
    driving privatization into the ground. Texas' issue is
    that there are too many inmates and not enough funds,
    combined with some small companies (like MTC) that will
    still bid low.

    However, there are few states
    that are doing this, and there is just the opposite in
    the Federal area. The Federal business is booming in
    the private market, and all estimates are that it
    will only get stronger. The Federal business looks
    more to quality vs low price, and the recent Federal
    contracts (with per diems in the $80's) points to
    this.

    I do agree that the privates need a much more
    concentrated effort on the legislative front vs each of them
    doing it on their own, but I think that will
    come.

    Don't let Texas confuse the issue...in the end, this is
    a service that MUST be done, and the privates can
    do it more cost effectively...we just need to get
    the small guys to stop bidding low in Texas, but that
    will pass soon...in the meantime ... go Feds!!

  • Reply to

    Is Doc the industry?

    by flipper_58 Dec 22, 1999 6:54 PM
    investorgroup investorgroup Dec 22, 1999 8:04 PM Flag

    I would not call him the industry. Doc did great
    things to get this industry going...he was out there in
    the beginning when nobody cared about the industry
    (unfortunately, a little of what we see today). However, over the
    past 5 or 6 years, this business, like other new
    industries, has become "more professional", which has spawned
    several professional private prison management companies
    (WHC and CRN included).

    I think Doc's style of
    doing what he wants, regardless of what people think is
    one of the things that helped him in the early days,
    but it has been part of what has brought him down
    now. His moving on should be viewed positively as one
    further step in the professional progression of this
    relatively new industry.

    The industry fundamentals
    are still very strong. A new professional management
    team (like WHC and CRN has done) is a positive step to
    the sustainable growth of this business.

    I
    wish Doc well; he previously did alot for this
    industry, but it's time to move on.

  • Reply to

    Comparables

    by flipper_58 Dec 21, 1999 10:09 AM
    investorgroup investorgroup Dec 21, 1999 6:58 PM Flag

    only filed a $350 million Shelf filing. Shelf
    filings don't mean much, but are typically a tool to keep
    in reserve to be used over the next several
    years.

    As far as ROE and debt levels in this industry
    (regardless of whether it's PZN, WHC or CRN), you need to
    look at the visible contracted earnings (i.e. which is
    typically 12 or more months in the future) and compare it
    to current equity and debt levels. Basically, this
    industry has to borrow debt and issue equity today for a
    "contracted" award, which will generate contracted profits,
    but only after the facility is built. On a run-rate
    basis, these companies typically have a 30%-50%
    improvement over the current ROE levels. This will give a
    better apples-to-apples comparison.

    That being
    said, debt levels are something that this industry will
    need to deal with, expecially until the equity prices
    get better (and IMHO, they will get better after
    yearend). I think you will see more sale leaseback
    transactions, and possibly an increased use of REITS (which
    should be good for PZN and CPV --- if they can raise the
    $$), and an increased use of municipal
    financing.

    Prison REITs are a good idea (i.e. a very stable tenant,
    regardless of the economy, etc), however, IMHO, PZN must
    change it's management in order to restore credibility
    to the company.

  • Reply to

    Flipper 2

    by Reitmaster_98 Dec 21, 1999 2:18 PM
    investorgroup investorgroup Dec 21, 1999 6:49 PM Flag

    WallStreetBlues ... what contracts are you
    referring to that OPCO has lost lately? Other than a couple
    of small contracts (mostly in Texas) that CCA has
    walked away from (because of low margins, etc. --- which
    is positive), I'm not aware of CCA losing any
    contracts?

  • Reply to

    Question on special dividend

    by gimme_britney_spears Dec 16, 1999 3:16 PM
    investorgroup investorgroup Dec 17, 1999 2:25 PM Flag

    ...of PZN's management with the potential of the
    industry. No question that PZN's management have destroyed
    their credibility, but the corrections industry
    (private) is one of the few industries that, fundamentally,
    will go on long after we are all around to care about
    it.

    PZN's organizational structure and management issues
    will work itself out; when the dust settles, the
    credible players in the industry should again receive the
    positive consideration it deserves.

    IMHO, there is
    plenty more to be made here. Like I've said before, the
    "fundamentals" of this business haven't changed...and after the
    dot-coms lose their luster, people will again focus on the
    private corrections' positive fundamantals (hopefully Doc
    and crew will be long gone by then, replaced with a
    credible management team).

  • Reply to

    I talked to Kerry Today at IR

    by Reitmaster_98 Dec 16, 1999 2:59 PM
    investorgroup investorgroup Dec 17, 1999 9:09 AM Flag

    Reasonable point given this odd 1999 year. I
    definately made more money on CRN than WHC, but I've been
    investing in this business since the mid-90's, and there
    have been many up/down movements in these stocks since
    then. I've been in and out of all of them, made the
    most $$ on CRN, and most of the $$ I made in WHC was
    before 1998, but there are still good opportunities. I
    own mostly CRN now, with a little still spread in the
    others.

  • Reply to

    I talked to Kerry Today at IR

    by Reitmaster_98 Dec 16, 1999 2:59 PM
    investorgroup investorgroup Dec 16, 1999 11:19 PM Flag

    ... about WHC and CRN is that they both have
    significant contracted backlog and a small outstanding share
    base. This translates into good/higher future EPS
    visabiliity than PZN has (and neither has "management" issues
    that PZN has). In addition, WHC has international
    business and CRN has access to three funding sources
    (prisons, juveniles and treatment/halfway
    houses).

    I've been long on CRN and WHC for awhile; made money
    on both, and feel good that 2000 will be a good year
    for them after this PZN smoke clears.

  • Reply to

    Thank, Congo

    by chingachgook_1999 Dec 14, 1999 11:47 PM
    investorgroup investorgroup Dec 16, 1999 6:12 PM Flag

    Shareholder Rights Plans are one of the most
    common things around. They are there because management
    is in the best position to evaluate an offer (i.e.
    management knows of inside information that the outside
    investor doesn't, etc.). It does not take away
    management's fiduciary obligations to look at bonified
    offers.

    Typically, a plan like this will result in a higher price
    being paid for a company in a take-over situation,
    because it allows management to bring the suitor to the
    table to negotiate (and base the negotiations on the
    inside information).

    IMHO, This should not be
    viewed negatively, and is a positive in most situations.
    It just means that someone cannot manipulate the
    stock and swoop in and purchase the company at a less
    than optimum price.

  • Reply to

    Board is still wrapping up.

    by ToyPlayerFUN99 Dec 16, 1999 12:27 PM
    investorgroup investorgroup Dec 16, 1999 6:03 PM Flag

    as to what is going on and should you hold or
    sell is addressed in Message #820 on WHC's
    board.

    However, it only answers some of your question
    (InvestorFormerlyKnownasRookie). If you have a couple of days, you can also sort
    through the many massages on this board (although many
    are clearly emotionally driven).

    Good Luck.

  • Reply to

    New Lows...Baby

    by Easily_Confused Dec 9, 1999 4:59 PM
    investorgroup investorgroup Dec 16, 1999 5:55 PM Flag

    ... in the stock market is to focus on the
    fundamentals of why you originally got interested in a stock
    (and whether those fundamentals have changed), and to
    not let emotions come into play.

    The private
    corrections industry still has very strong fundamentals and
    some very good companies (WHC and CRN IMHO are the
    best). These stocks have been hurt by many things (none
    of which are fundamantal changes in the industry
    though), with one of the biggest problems coming from
    management issues at PZN and PZN's REIT/OPCO
    structure.

    Many other industries have gone through cycles (Oil
    and Gas, Financial Institutions, etc.), only to
    recover many times over. The bottom line is that the need
    for housing inmates and various treatment methods
    needed for them will, unfortunately, never go away. This
    is a function that MUST be performed, and the
    private sector can do it as well as (and sometimes
    better) as the public sector and save taxpayers $$$. At
    the end of the day, that's what gets votes (i.e.
    tough on crime AND saving tax dollars), and the shear
    strength of the fundamentals will remain strong. The only
    question is which companies will prosper the best ... but
    this industry has so much growth that there is plenty
    of room for several successful players.

    These
    down cycles are great times to let the sheep run away,
    while we average down and wait for the inevitable
    rebound.

    I'm long on WHC and CRN ... I'd keep an eye on both
    of them.

  • Reply to

    Special dividend is guaranteed.

    by Reitmaster_98 Dec 6, 1999 11:28 AM
    investorgroup investorgroup Dec 7, 1999 9:43 AM Flag

    I doubt that Georgia would cancel any contract
    with the privates due to price. The State of Georgia
    estimates their own per diem cost to be in the high $50's;
    PZN/CCA's rate is in the mid 40's and the other private
    provider in Georgia, CRN, is in either the high 30's or
    low 40's. Either way, the privates' costs are
    significantly lower than the State, and Georgia has stated they
    need the bed space.

    I'd guess that if there was
    any truth to PZN/CCA not renewing the Georgia
    contract, it would be because PZN/CCA had another source of
    inmates in mind. I hear that Georgia can be difficult to
    deal with sometimes.

  • Reply to

    Will Dividend Payment Be That Tough

    by justmyview Nov 30, 1999 6:16 PM
    investorgroup investorgroup Dec 2, 1999 11:17 AM Flag

    Private operators do not, and are not allowed to,
    perform executions. Privates don't want the legal
    liability nor the "loss of revenue" from one less
    inmate/execution.

    If there is an execution, it will be done at a State
    facility and performed by the State.

  • Reply to

    Historical Pespective necessary

    by manboking Dec 30, 1997 1:25 PM
    investorgroup investorgroup Sep 8, 1999 7:48 PM Flag

    DreamMaster ... thanks for the 10-Q quotes, it
    looks like CRN has alot of growth. I'm still not sure
    about your comment on Big Spring ... Big Spring either
    counts for 25% of beds "in operation" as you put it, or
    15% based on contracted beds. CRN's last 10-K
    indicated this is a Federal facility with over a 10-year
    history.

    Were you trying to make a point with your comments on
    Big Spring and the variable interest
    rates?

    But either way, I'm glad it's "crystal clear" to you.

  • Reply to

    Historical Pespective necessary

    by manboking Dec 30, 1997 1:25 PM
    investorgroup investorgroup Sep 8, 1999 8:50 AM Flag

    Manboking, your facts on CRN seem to be abit odd.
    You mention they have a bulk of their facilities in
    Big Spring, are a secondary stock, etc.
    However,
    the last press release I saw from CRN indicated they
    had 56 facilities in 12 states + DC, with over 13,000
    beds (only about 2000 +/- were in Big Spring)?
    In
    addition, while CRN has accumulated some debt (I wouldn't
    call it "loaded" though), they have more Real Estate
    $$$ than any others (even more than WHC used to start
    it's REIT/CPV). One reason WHC paid down it's debt is
    from their sale of real estate to its REIT; I'd guess
    that CRN will eventually sell its real estate and
    realize a similiar debt paydown. With a smaller share
    base, CRN seems to grow at a faster EPS % than the
    others (although the others grow at a healthy rate
    too).

    I do agree with your point that disturbances at
    prisons go with the territory, and the pressure on all
    the corrections stocks (PZN, WHC, CRN, etc) seems to
    be more media-hype related, and not due to any
    fundamental changes in the corrections industry.

    I'm
    still Long on this entire industry.

  • Reply to

    Historical Pespective necessary

    by manboking Dec 30, 1997 1:25 PM
    investorgroup investorgroup Sep 3, 1999 9:06 AM Flag

    While what happened to the guard is a tragedy,
    people seem to forget that the rate of incidents are far
    greater in non-private facilities...it's just that any
    incident at a private facility gets splashed all over the
    news.

    The harsh fact is that all this news, etc. hasn't
    changed the strong fundamentals of this industry at all.
    This industry has strong predictable revenue/earnings
    stream, and the incidents unfortunately will
    happen.....but it doesn't change the strong prospects of private
    corrections.

    If you're a long-term investor in this industry
    (regardless of which company ... WHC, CRN, PZN, etc), this
    should be a buying oppurtunity.

  • Reply to

    d%&$** unions

    by pkn4mom Jul 19, 1999 8:02 AM
    investorgroup investorgroup Jul 20, 1999 2:34 PM Flag

    SunTrust Equitable Securities (STE) has been
    following the Private Corrections industry longer than any
    other firm I am aware of. STE had/has a dedicated
    "private corrections" group (i.e. vs most other firms that
    cover PZN,CRN,WHC,CPV, etc within the Special
    Situations Group. Brian Ruttenbur is/was the analyst at STE,
    and he seems to have built a strong analyst group
    there. It's not unusual for STE to have been on these
    companies' offering cover since STE is very knowledgable of
    the industry. I believe Legg Mason has done most of
    PZN's deals.

    Although the Private Corrections
    Industry still lacks sufficient coverage/exposure, that
    should take care of itself in time since the growth
    fundamentals of this industry keep getting stronger. There are
    currently about 6-8 firms covering the industry, with STE
    being one of the first.

    Hope this helps. Good
    Luck.

GEO
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