Sequestration Seen Bullish for Prison Companies Amid Cuts

Source: Kathleen Miller, Bloomberg News, March 27, 2013

…Economic losses for rural communities that rely on prison revenue may turn out to be a gain for companies such as Corrections Corp. of America and Geo Group Inc (GEO)., which are positioned to help federal officials drive down incarceration costs, said Tobey Sommer, an Atlanta-based analyst with SunTrust Robinson Humphrey Inc. …Investors appear to agree that Corrections Corp. (CXW) and GEO Group — which together have captured $7.1 billion in U.S. contracts since 2000 — may be better positioned to meet the demands of a more competitive landscape. Shares of GEO Group, which manages or owns 100 facilities worldwide, jumped 121 percent and Corrections Corp. increased 46 percent over the past 12 months. The Standard & Poor’s index of 400 mid-sized businesses rose 14 percent in the same period. …