NEW YORK, Oct 18 (Reuters) - Shares of prison operators Corrections Corp of America, Geo Group and Cornell Cos may be undervalued, according to a report in business weekly Barron's.
The shares of each have rebounded this year to trade at 12 to 18 times what each is expected to earn in 2010 -- compared with multiples before the credit crisis of near 30 times earnings, the paper said in its Oct. 19 edition.
The U.S. has a large prison population of more than 2 million, the report said, and some state governments may be eyeing increased use of private prisons rather than spend on building new public ones.
Signal Hill analyst T.C. Robillard rates all three companies at 'Buy,' but gives the edge in the short term to Cornell over Geo, and to Geo over CCA over the next six to 12 months. Robillard argues that CCA's bigger balance sheet gives it the most options, the report said.
(Reporting by Franklin Paul; Editing by Steve Orlofsky) Keywords: PRISON/SHARES (Email: Franklin.Paul@thomsonreuters.com; +1 646 223 6195; Reuters Messaging: Franklin.Paul.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
The shares of each have rebounded this year to trade at 12 to 18 times what each is expected to earn in 2010 -- compared with multiples before the credit crisis of near 30 times earnings, the paper said in its Oct. 19 edition.
The U.S. has a large prison population of more than 2 million, the report said, and some state governments may be eyeing increased use of private prisons rather than spend on building new public ones.
Signal Hill analyst T.C. Robillard rates all three companies at 'Buy,' but gives the edge in the short term to Cornell over Geo, and to Geo over CCA over the next six to 12 months. Robillard argues that CCA's bigger balance sheet gives it the most options, the report said.
(Reporting by Franklin Paul; Editing by Steve Orlofsky) Keywords: PRISON/SHARES (Email: Franklin.Paul@thomsonreuters.com; +1 646 223 6195; Reuters Messaging: Franklin.Paul.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
