GEO - GeoGroup

[n.r98]

This is not a cool type of idea(anymore) but just wondering what does the cobf forum think of this? 

-Industry pessimism

-Recent sell-off due to tremendous pessimism as a result of dividend suspension; many in for the high yield dividends ran out the door once the "double-digit guarantee" was obliterated. 

-Balance sheet bloat; $CXW has a nicer balance sheet.

 

However, sell-off seems a little over-reactionary, private prisons own a ton of "irreplicable" hard assets, generally have long term contracts(though that is presently questionable) and highly free cash flow(most of capex is growth) generative. The dividend cut seems like a good thing for corporate preservation though it may have elicited some nausea. Currently trading for ~2-3x 2020 FCF. Seems like any sort of good news; corporate restructuring(like that of CXW), shift in short term sentiment, will be a net positive on the stock price.