CXW Runaway Gap-Up
By Johns Wu on Aug 01, 2006
CXW, Corrections Corp or America, is in a bullish uptrend after making a runaway gapup.
CXW formed a bullish hammer today after making a test of the uptrending support. The trend is your friend until it ends.
2 Responses to “CXW Runaway Gap-Up”
CXW has the prison on lock-down. The company operates more than 60 correctional, detention, and juvenile facilities with a capacity of some 70,000 beds in 20+ states. We think a large inventory of available beds should hit full capacity by Q207 and would gladly invest @ a better valuation (stock currently at 27.5 x current EPS, in line with most estimates and firm’s normalized 3 year EPS growth rate)…We also like how the firm has recently signed some new contracts (could add b/t $25-$45M to the top line) and improved its credit facilities (leading to better borrowing terms)….accelerated debt retirement could add to better EPS visibility and a higher stock price. With demand growth for prison beds outstripping supply growth, this is clearly a stock to keep both eyes on…
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For some extra info, CXW is becoming a bit more attractive for some of the major technical indicators, although not quite ready yet. CXW technicals