Corrections Corp of America (CXW) is out of lock-down

Today, Corrections Corporation of America (Public, NYSE:CXW) released a positive earnings statement and outlook. Much like an inmate must gain the trust of the guards to be released from lock-down, CXW has proved today that Wall Street should take them out of the ‘hole’.

CXW is an owner and operator of privatized correctional and detention facilities, and a prison operator in the United States. The Company operates 65 correctional, detention and juvenile facilities, including 41 facilities that it owns, with a total design capacity of approximately 78,000 beds in 19 states and the District of Columbia.

CXW 1-Year Chart:

While 1 out of every 142 Americans is now actually in prison, 1 out of every 32 of us is either in prison or on parole from prison, according to yet another report on Americans behaving badly from the Bureau of Justice Statistics.

Another interesting fact for you: Sixty-seven percent of former inmates released from U.S. state prisons in 1994 were back in jail within three years, according to a study conducted by the Justice Department's Bureau of Justice Statistics (BJS). The figures indicate re-arrest rates have increased by five-percent since 1983.

This Quarter, The Nashville, Tenn., company's profit grew 7 percent, to 28 cents per share, a penny above Wall Street estimates. Revenue increased 11 percent, and edged out analyst expectations.

Corrections Corp. maintained its full-year profit forecast, and said it is expanding the design of a facility in Adams County, Miss., which is currently under construction. The company now plans 2,232 beds for the facility, up from 1,668. Bed availability increased 7 percent in the first quarter.

Shares advanced $1.03, or 4 percent, to $26.80.

Banc of America analyst T. C. Robillard said prices and demand are strong. The expansion of the Adams County facility should lead to larger profits and profit margins starting in the second quarter and continuing into 2009, he said.

Stockmasters, it’s time to load up on CXW.

Article written by Eric Cheshier

Co-Founder of theStockMasters.com

If you liked this article, Eric Cheshier also contributes to the Master Picks Newsletter and the Quant Method , only available at WallstNewsletters.com.