Should You Avoid Corrections Corp Of America (CXW)?

Page 1 of 2

Is Corrections Corp Of America (NYSE:CXW) a buy?

In the eyes of many of your peers, hedge funds are assumed to be overrated, outdated financial tools of a forgotten age. Although there are more than 8,000 hedge funds with their doors open today, Insider Monkey focuses on the crème de la crème of this club, around 525 funds. It is assumed that this group controls the majority of the smart money’s total assets, and by monitoring their highest performing equity investments, we’ve discovered a few investment strategies that have historically outstripped the broader indices. Our small-cap hedge fund strategy outperformed the S&P 500 index by 18 percentage points a year for a decade in our back tests, and since we’ve started sharing our picks with our subscribers at the end of August 2012, we have beaten the S&P 500 index by 33 percentage points in 11 months (see all of our picks from August).

Just as useful, positive insider trading sentiment is another way to look at the marketplace. Obviously, there are lots of motivations for an executive to drop shares of his or her company, but just one, very obvious reason why they would initiate a purchase. Various academic studies have demonstrated the market-beating potential of this strategy if you know what to do (learn more here).

Corrections Corp Of America

Keeping this in mind, it’s important to study the latest info surrounding Corrections Corp Of America (NYSE:CXW).

What does the smart money think about Corrections Corp Of America (NYSE:CXW)?

Heading into Q3, a total of 19 of the hedge funds we track were bullish in this stock, a change of -27% from one quarter earlier. With hedge funds’ sentiment swirling, there exists an “upper tier” of notable hedge fund managers who were boosting their holdings considerably.

According to our 13F database, Jim Simons’s Renaissance Technologies had the biggest position in Corrections Corp Of America (NYSE:CXW), worth close to $37.6 million, comprising 0.1% of its total 13F portfolio. Coming in second is Highland Capital Management, managed by James Dondero, which held a $25.8 million position; 2% of its 13F portfolio is allocated to the stock. Other hedgies that are bullish include Ric Dillon’s Diamond Hill Capital, Ken Griffin’s Citadel Investment Group and Cliff Asness’s AQR Capital Management.

Since Corrections Corp Of America (NYSE:CXW) has experienced dropping sentiment from upper-tier hedge fund managers, it’s safe to say that there was a specific group of money managers who were dropping their positions entirely in Q1. Intriguingly, Neil Chriss’s Hutchin Hill Capital dumped the biggest position of all the hedgies we monitor, comprising close to $19.1 million in stock, and Eric Mindich of Eton Park Capital was right behind this move, as the fund dropped about $10.4 million worth. These transactions are intriguing to say the least, as total hedge fund interest dropped by 7 funds in Q1.

How have insiders been trading Corrections Corp Of America (NYSE:CXW)?

Bullish insider trading is at its handiest when the primary stock in question has experienced transactions within the past half-year. Over the last half-year time frame, Corrections Corp Of America (NYSE:CXW) has seen zero unique insiders buying, and zero insider sales (see the details of insider trades here).

We’ll also examine the relationship between both of these indicators in other stocks similar to Corrections Corp Of America (NYSE:CXW). These stocks are FTI Consulting, Inc. (NYSE:FCN), Booz Allen Hamilton Holding Corporation (NYSE:BAH), The Corporate Executive Board Company (NYSE:CEB), Towers Watson & Co (NYSE:TW), and Genpact Limited (NYSE:G). This group of stocks are in the management services industry and their market caps are closest to CXW’s market cap.

Page 1 of 2
blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 44 percentage points in 21 months Learn how!

Lists

The Top 10 States With Fastest Internet Speeds

10 Best Places to Visit in USA in August

Top 10 Cities to Visit Before You Die

Top 10 Genetically Modified Food In the US

15 Highest Grossing Movies Opening Weekend

5 Best Poker Books For Beginners

10 Strategies Hedge Funds Use to Make Huge Returns

Top 10 Fast Food Franchises to Buy

10 Best Places to Visit in Canada

Best Summer Jobs for Teachers

10 Youngest Hedge Fund Billionaires

Top 10 One Hit Wonders of the 90s

Fastest Growing Cities In America

Top 10 U.S. Cities for Freelancers

Top 9 Most Popular Free iPhone Apps

Top 10 Least Expensive Private Business Schools in the US

Top 15 Most Expensive Countries in the World – 2014

Top Businesses to Invest In

Top 5 Things You Might Be Doing Wrong With Your Business

Top 5 Strategic Technology Trends in 2014

Top Rags to Riches Stories

Parenting Behavior That Promotes Future Leaders

Top 5 Mistakes Made by Small Businesses

Top 5 Most Common and Potentially Devastating Financial Blunders

Top 5 Highest Paying Jobs for Web Designers

Top 6 Most Respected Professions that Also Pay Well

Top 5 Pitfalls Investors Should Avoid

Top 6 Lawyers and Policy Makers Under 30

Top 6 New Year’s Resolutions for Entrepreneurs

Top 7 Locations to Check in on Facebook

Top 5 Mistakes made by Rookie eBay Sellers

Top 7 eBook Publishers in 2013

Top 6 Health Industry Trends in 2014

5 Lessons for Entrepreneurs from Seth Godin

Top 5 Success Tips from Jordan Belfort – the Wolf of Wall Street

Best Master’s in Finance Degree Programs

Top 6 Earning Celebrities Over 50

The most expensive sports to play

Top 7 Earning Celebrities Under 25

Best 7 Online Courses to Take: Free Finance MOOCs

Top 6 Bad Habits that Promote Failure

20 Most Valuable Soccer Teams in the World in 2013

12 Most Expensive Countries for Foreign Students

Top 30 Most Influential Women in the World

Top 20 Most Expensive New Year Eve Shows

Top 5 Best Vocational Careers

Top 10 Jobs for 2014 by Salary Gain (Predictions)

Top 5 Digital Trends for 2014

Top 6 Things You Can Do To Increase Your Productivity

Top 9 Trending Smartphones in 2013

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!