Four Prison Stocks Worth Locking Up in Your Portfolio

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 (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. (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. (CITY.PK) 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.

Comments

[singh:]

u forgot ALAN

2007 Jun 06 08:59 AM

[Learning Curve:]

Thank you for identifying this group. I'll sell any fund that I own that holds any of these corporations. I'll sell the fund just as I did FMILX & FCPGX.

2008 May 16 03:37 PM