The Geo Group (GEO) And Cornell Companies (CRN) Bouncing Off Ackman Comments On Corrections Corp (CXW)

As we noted earlier, Pershing Square's Bill Ackman told the sold out Value Investing Congress that he purchased shares of Corrections Corporation of America (NYSE: CXW) at approximately $24.50 a share.

Ackman's announcement that he bought CXW has caused other stocks in the prison sector to spike in late day trading. Cornell Companies (NYSE: CRN) moved up a 2.3% and The Geo Group (NYSE: GEO) rose approximately 2.5% after Ackman's comments made it to the wires.

Ackman thinks Corrections Corp of America is worth $40 to $50 and Pershing Square owns 9.5% of the stock.

Benzinga analysts noted in the past that several hedge funds are very bullish on the prison management sector and Ackman's comments today further give credibility to the thesis that prison companies are good in a difficult economic environment. Typically, the tougher the economic climate results in more crime and thus prisons will receive more inmates and earn more money.

The Geo Group, Cornell Companies and Corrections Corporation of America could continue to hit new 52-week highs as more hedge funds follow Ackman into the sector.

At the Value Investing Congress today, Pershing Square's Bill Ackman said investors should take a serious look at Corrections Corporation of America (NYSE: CXW).

Bill Ackman says Corrections Corp of America is cheap and CXW is taking meaningful market share from competitors.

Ackman paid more than $25.50 a share for his investment in CXW.

Corrections Corporation of America is currently trading up 2.50% to $25.12.

Corrections Corporation of America is an operator of prisons.