Time to Lock in 100% Gains in Six Months with Prison Stock
Correctional Services posted July 15, 2005 (CSCQ)
By Michael Brush
July 15, 2005
Last January, we suggested buying shares of prison company Correctional
Services (CSCQ)
because it’s in a growth sector, insiders were buying, and also because it
looked incredibly cheap with a price to sales ratio of just .22.
Apparently The Geo Group (GGI),
one of the nation's largest prison operators, agrees. It said Thursday that
it’s buying Correctional Services for $62 million in cash, while assuming
$124 million in Correctional Services debt.
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The deal works out to $6 in cash for shareholders. That adds up to 106% in
gains in six months for anyone who bought shares at $2.90 when we took a
look at prison stocks that had insider buying, back in January
http://www.investorideas.com/insiderscorner/Articles/Lock_Down.asp.
Bottom line: Because of the need for regulatory approval and other
hurdles, the deal probably won’t go through until the fourth quarter. So I’d
advise taking profits now, around today’s close of $5.82 to lock in 100%
gains, instead of holding out until the fourth quarter for the other 6%.
That way, you’ll have more cash to deploy into a new Insiders Corner picks
with potential gains greater than 6% by the end of the year.
Disclaimer
At the time of publication, Michael Brush did not own or control shares in
any of the companies listed in this column. Mr. Brush is an independent
columnist for this web site.
For more on Insiders Corner disclosure, see the disclosure section in About
Insiders Corner:
http://www.investorideas.com/insiderscorner/. InvestorIdeas.com
Disclaimer:
www.InvestorIdeas.com/About/Disclaimer.asp. InvestorIdeas is not
affiliated or compensated by the companies mentioned in this article.
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