A bad day to Buy Stock in the modern day Auschwitz (CXW)

The shadow of institutionalized human trafficking is a dark thread woven throughout history, manifesting in forms as grim as the forced labor camps of Auschwitz and Buchenwald during World War II. These institutions, while created under vastly different circumstances, share a grim purpose: commodifying human beings for profit or power. Today, while we no longer see camps of that scale or explicit cruelty, the echoes of these practices remain embedded in modern systems like for-profit prison companies, such as CoreCivic (CXW).

CoreCivic operates at the intersection of justice and capitalism, profiting from the incarceration of individuals. The concept of institutional human trafficking persists, albeit under sanitized terms like “private correctional facilities” and “detention services.” Just as Auschwitz and Buchenwald profited off human exploitation under totalitarian regimes, today’s private prison systems derive revenue from incarcerating individuals, raising questions about morality, governance, and capitalism.

This article explores how CoreCivic’s performance, seasonality, and responsiveness to political landscapes tell the story of a company entrenched in this modern institutional framework, particularly as it navigates the political winds of the Trump and Biden administrations.

CoreCivic’s Financial and Market Performance
CoreCivic (CXW) operates as one of the largest private prison companies in the United States. As of today:

• Market Capitalization: $2.45 billion.
  
• Revenue Stability: Quarterly revenue ranges between $390 million and $520 million.
  
• Earnings Growth: CoreCivic's earnings have shown resilience, with positive surprises in some quarters, such as Q4 2023 and Q2 2024, though inconsistency remains a challenge.
  

Technical Indicators:
Overall Technical Rating: Sell / Short

• Moving Averages: Sell signals dominate across short- and mid-term moving averages (e.g., EMA 10, 20, 30).
  
• Oscillators: Mixed signals, with some like Bull Bear Power suggesting a buy, while others like MACD signal a sell.
  
• Long-term indicators (e.g., SMA 200) lean toward a more neutral or bullish outlook.
  
• Analyst Forecast and Recommendations: 3 analysts rate it a strong buy, 1 as hold, and none as sell. Near-term technical ratings are bearish, but the long-term outlook is optimistic based on analyst forecasts.
  
• 1-4 Year Price Target: $28.75, representing a potential +32.86% upside.
  - Minimum target: $25.00 (+15.63%).
  - Maximum target (short target): $32.00 (+48.01%).
  

Price Performance:

• YTD performance is relatively flat at -0.28%, with significant gains over 6 months (+49.11%) and 1 year (+45.90%).
  
• Weekly performance has dipped by -4.61%, signaling possible short-term weakness.
  

Seasonality Trends:
CoreCivic exhibits predictable seasonal performance, with stronger months historically observed in October and November:

• November 2016: A +57.16% gain, aligning with the Trump election and expectations of favorable policies for private prison companies.
  
• November 2022: Another standout month with a +61.69% return, likely tied to seasonal adjustments and specific market expectations.
  
• Weaker months, such as August and September, reflect broader market pressures or reduced contract announcements. For instance:
  
• August 2017: A -16.46% loss following political shifts and public criticism of private prisons.
  
• September 2023: A -8.20% decline, signaling continued volatility.
  
• Comparing Trump and Biden Administrations’ Impacts on CoreCivic
  

Trump’s First Term (2017-2020):
Under President Trump, CoreCivic saw policies that bolstered the private prison industry:

• Pro-Privatization Rhetoric: The administration expanded contracts with private prison operators, benefiting CoreCivic directly.
  
• Immigration Detention Surge: Policies like family separations at the border led to increased use of private detention facilities.
  
• Performance: CoreCivic thrived during this period, with standout months like January 2017 (+18.72%) and November 2016 (+57.16%), reflecting investor confidence in sustained revenue growth.
  

Biden’s Term (2021-Present):
In contrast, President Biden’s administration adopted a more critical stance:
Executive Orders: Early in his term, Biden issued an order to phase out federal contracts with private prisons. While the impact was limited to certain contracts, the signal was clear: a reduced reliance on privatized incarceration.
Market Volatility: CoreCivic’s performance became more erratic, with sharp losses like August 2022 (-50.30%) and rebound months such as November 2022 (+61.69%).

The Ethical Quandary of CoreCivic’s Business Model
CoreCivic's operations invite ethical scrutiny. Critics argue that private prisons create a perverse incentive to maintain high incarceration rates, disproportionately affecting marginalized communities. This mirrors historic systems of exploitation, where profit motives overshadowed human rights. While CoreCivic may not directly engage in the atrocities of Auschwitz or Buchenwald, the parallels of commodifying human beings cannot be ignored.

Both systems demonstrate how institutions can profit from human suffering, whether under the guise of national security or law enforcement. As we analyze CoreCivic's financial data, we must confront the uncomfortable reality of what drives its profits—and how society enables such systems.

Unless you want to purchase a get out of concentration camp free card, buy CXW isn't just morally and ethically wrong, it's financially incompetent as it will inevitably run into issues related to changes in local and federal government, civil rights lawsuits, mismanagement issue, all for mediocre performance compared to entire REIT asset class which generally produce a dividend without the moral issues.