Market Got You Down? Buy Prison Stock!

The Wall Street Journal (WSJ) had a story recently about the recession-bucking private prison industry. The President of Corrections Corp, (CCA) the nation’s largest private prison contractor, sees dollar signs ahead: “There is going to be a larger opportunity for us in the future.” The company saw a 14% increase in income for the third quarter alone, and its stock rose 3.16% today. In fact, it has steadily been rising all week.

Geo Group is another large private prison company who expects big profits ahead. (Their stock rose 2.87% today). Why is the future so rosy? According to Stephanie Chen of the WSJ, the feds are running out of money to spend on new prisons while prison populations are rapidly increasing.

How bright is CCA’s future? According to the San Diego’s Union Tribune, CCA is currently planning to build a massive 3,000 detention facility for ICE near San Diego. They are awaiting permits from the county. Considering that California prisons are currently holding double their designed capacity, (and ICE’s nearby facility was recently sued by the ACLU for overcrowding) CCA seems to be in a pretty good bargaining position.

So what are you waiting for? Call your stock broker now!