One Prison Operator and Two Retailers Register Noteworthy Insider Selling

Moving on the next topic of discussion, Corrections Corp Of America (NYSE:CXW) had three different executives offload shares this March. So let’s take a quick look at the most recent insider selling activity. To begin with, Chairman John D. Ferguson disposed of 60,000 shares on Monday and Tuesday at prices that fell between $32.02 and $32.28 per share, of which 30,000 units were held through Calco Investments LLC and the remaining shares were held via Ferguson Financial LLC. After the recent sell-off, each of the two entities continues to hold a 50,573 share-block. Mr. Ferguson also holds a direct ownership stake of 14,915 shares. On March 15 and 16, Steven E. Groom, Executive Vice President and General Counsel, unloaded 58,150 shares at prices ranging from $30.89 to $31.10 per unit, cutting his holding to 19,873 shares.

Corrections Corp Of America is the largest owner of privatized correctional and detention facilities in the United States, owning 66 correctional and detention facilities and managing an additional 11 facilities owned by government partners as of the end of 2015. The prison operator activates as a real estate investment trust, so income-seeking investors may consider this REIT as a possible investment opportunity. The REIT derives revenue from operating and managing correctional and detention facilities, renting from facilities leased to third-party operators, and revenue from inmate transportation services. The REIT’s 2015 total revenue was $1.79 billion, which increased $143.1 million or 8.9% year-on-year. The increase was mainly driven by an increase of 14.5% in average revenue per compensated man-day, which was offset by a decrease in the average daily compensated population. The drop in average compensated population was primarily due to the expiration of the company’s contract with the Federal Bureau of Prisons at its Northeast Ohio Correctional Center and a drop in California inmates in out-of-state facilities. The REIT pays out an annualized dividend of $2.16 per share, which equates to a current dividend yield of 6.57%. Nonetheless, the REIT’s payout ratio above 100% might suggest that the dividend payments are not entirely sustainable. The number of money managers from our system with stakes in the prison operator climbed to 17 from 15 during the December quarter. Ric Dillon’s Diamond Hill Capital reported an ownership of 1.17 million shares in Corrections Corp Of America (NYSE:CXW) through the fund’s latest 13F.