Corrections Corp Should Be Gotten

Corrections Corp. of America (CXW - Snapshot Report) is the largest private owner and operator of correctional and detention facilities in the United States. The company owns and operates medium and maximum level security facilities for the US Federal government, 20 state agencies and numerous local agencies.

We reiterate our Buy rating on shares of CXW prior to the release of third-quarter results. Corrections Corp. holds a significant market share advantage over its peers, with a substantial pipeline of additional capacity scheduled to be added to the portfolio over the next two years. The company is the clear leader in an industry with a strong outlook, supported by favorable economic and demographic trends.

We consider the current price to represent an attractive entry point. Our target price equates to multiples of 27x and 22x our '08 and '09 EPS estimates, respectively. CXW will report Q3 results on 11/6/08.

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