(CXW) - Strong Long-Term Hold - privatized correctional and detention facilities - Corrections Corporation of America

Corrections Corporation of America has exceeded earnings estimates for four consecutive quarters. All four analysts raised their estimates for this year. Over the past week, this year's estimates have increased 5.7% to $2.40 per share, while next year's numbers have also jumped 5.7%. The stock is trading at 22.1x next year's estimates, slightly above the projected long-term growth rate of 20%, giving the stock a PEG ratio of 1.10. Full Analysis Corrections Corporation of America (CXW) engages in the ownership and operation of privatized correctional and detention facilities in the United States. It designs, builds, and manages prisons, jails, and detention facilities, as well as provides inmate residential and prisoner transportation services. The company's facilities offer various rehabilitation and educational programs, including basic education, religious services, life skills and employment training, and substance abuse treatment. Corrections Corporation also provides healthcare services, including medical, dental, and psychiatric services; food services; and work and recreational programs. It serves federal, state, and local correctional and detention authorities. CXW reported robust second-quarter earnings. For the three months ended June 30, 2006, the Company reported net income of $25.6 million, or 63 cents per share, compared with net income of $14.9 million, or 37 cents per share, for the 2005 comparable period, an increase of 70.3% per share. Analysts had expected 57 cents per share. Total revenue for the second quarter of 2006 increased 12.4% to $326.2 million from $290.2 million during the same period in 2005, as total compensated man-days increased to 6.1 million from 5.7 million, and as revenue per compensated man-day increased to $52.51 from $50.31, an increase of 4.4%. Average compensated occupancy for the three months ended June 30, 2006 increased to 94.8% from 90.1% for the three months ended June 30, 2005. Commenting on the Company's financial results, President and CEO John Ferguson stated, "We are very pleased with our second quarter financial results as our earnings benefited from higher than expected inmate populations at a number of key facilities. Our margins also improved due to leveraging fixed costs over higher inmate populations." The company has exceeded earnings estimates for four consecutive quarters. All four analysts raised their estimates for this year. Over the past week, this year's estimates have increased 5.7% to $2.40 per share, while next year's numbers have also jumped 5.7%. The stock is trading at 22.1x next year's estimates, slightly above the projected long-term growth rate of 20%, giving the stock a PEG ratio of 1.10. Note: The Zacks Rank is a very sensitive indicator that can change frequently for an individual stock. This important indicator is updated daily on Zacks.com and is available to Zacks Premium subscribers. As such, it is prudent to check the site for the latest Zacks Rank on the stocks highlighted in this section. Simply click the link for the stock or enter the symbol in the ticker entry box in the upper left hand corner of the web site. Content Courtesy: Zacks Investment Research #1 Ranked Stocks Highlight Archive To truly take advantage of the Zacks Rank, you need to first understand how it works. That is why we created the free special report: Zacks Rank Guide: Harnessing the Power of Earnings Estimate Revisions. | Blog Home| VitalStocks Home