It seems like not a week goes by where we don't hear about a celebrity, a sports figure, a business person, or a politician going to jail. For the last several days, we've been bombarded with news about Paris Hilton going to jail. So is there a way to make money off these jailbirds? There are actually several publicly traded companies that provide prison services to governments.
Here are a few that you should thoroughly research before letting them into your portfolio:
The largest by both market cap and revenues is Corrections Corp. of America (NYSE:CXW), which is a company with over 40 facilities that is based in Nashville, Tennessee. It has a P/E of 34, and a PEG of 1.8. Its revenues were up over 52% year over year on a revenue gain of 11.5%.
The next largest company is Geo Group Inc. (NYSE:GEO), which is based in Boca Raton, Florida. It has facilities in the United States, Australia, Canada, South Africa, and the U.K. It has a P/E of 36, and a PEG of 1.7. The stock trades on the NYSE.
Cornell Companies Inc. (CRN) is a Houston, Texas company, which in addition to providing detention services, also provides educational services to detainees. It has a P/E of 28, and a PEG of 2.5.
Avalon Correctional Services Inc. (OTCPK:CITY) is a micro-cap stock which trades on the pink sheets, and should be considered very speculative. It operates correctional facilities in Oklahoma, Texas, and Colorado.
Disclosure: The author does not own any of the above.