Verdienen am Knast ??? - GEO Group (Seite 23)

[freddy1989]

Antwort auf Beitrag Nr.: 67.788.149 von MisterGoodwill am 13.04.21 08:12:00

Naja ich frage mich auch echt wo die USA ihre Gefangen sonst unterbringen wollen haben ja gar nicht die Gefängniss kapazitäten also das mit dem Schließen sagt sich so einfach

und ich denke es gibt bestimmt auch eine Gefängnisslobby in den USA

[MisterGoodwill]

Gerade wenn es am hoffnungslosesten ist, kommen die Aktien gerne wieder.

[lazy_invest]

Antwort auf Beitrag Nr.: 67.784.693 von MisterGoodwill am 12.04.21 20:04:39

Was hat sich denn für dich geändert im Vergleich zu vorgestern ("...hoffnungslos...")?

[MisterGoodwill]

Habe mir mal 50 zum Spaß geholt. Beobachte die Lage mal ob noch 100, 200 oder gar 500 nachkaufe.

[Andrija]

Antwort auf Beitrag Nr.: 67.773.794 von kai-uwe am 12.04.21 08:13:01

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GEO Group Needs A Strategic Reset
Apr. 09, 2021 9:22 AM ETThe GEO Group, Inc. (GEO)CXW88 Comments16 Likes
Summary

We believe GEO needs to immediately pivot its strategy to deal with the realities of the current political climate to protect shareholder value.
We urge GEO to begin negotiations with the US Bureau of Prisons (BOP) and United States Marshals Service (USMS) to sell or lease Company-owned facilities to these government entities.
We have identified 30 facilities that GEO should immediately seek to sell. These facilities encompass 24k beds and we believe GEO could monetize these assets for $1.9 – 2 billion.
We believe the intrinsic value of the GEO equity is $14-15 per share, but it will require the Company to pivot its strategy.

The GEO Group (GEO, the “Company”) jarred investors yesterday when it announced that it was suspending the quarterly dividend payments and undertaking a review of the Company’s structure as a REIT. The goal, according to GEO, is to maximize the use of cash flows to repay debt, deleverage, and internally fund growth. GEO did not explicitly say it will abandon the REIT structure, but we believe this is a foregone conclusion as the Company follows in the steps of CoreCivic (NYSE:CXW), which abandoned the REIT structure at the end of 2020.

Given that GEO’s stock was primarily owned by income investors who coveted the predictable dividend stream and presumable safe government counterparties, we are not surprised the stock was down -20% yesterday and another -6% today to a 15-year low. We believe GEO is at an existential crossroad and the Company needs to immediately pivot its strategy to deal with the realities of the current political climate in an effort to protect shareholder value.

We propose the Company immediately embarks on the following initiatives:

Begin negotiations with the United States Bureau of Prisons (BOP) and United States Marshals Services (USMS) to sell or lease Company-owned facilities to these government entities.
Adopt a mindset that private prisons are not a growth industry and adjust its corporate strategy accordingly. The Board should be focused on enhancing intrinsic value per share, rather than absolute size metrics like total revenue or total beds.
Recognize the value of GEO is now in its assets, not its future earnings.
Conduct a thorough review of the facilities the Company is leasing from other owners and develop a strategy for letting these leases expire if the facilities do not have secure contracts in place and provide an adequate return for GEO.
Pause all growth capital expenditures and focus instead on maintenance capital expenditures, with the goal of improving occupancy at existing Company-owned facilities.

The operating environment was fundamentally altered when President Biden issued the Executive Order

We believe the operating environment for GEO was fundamentally altered when President Biden issued the Executive Order on Reforming Our Incarceration System to Eliminate the Use of Privately Operated Criminal Detention Facilities on January 26, 2021. We are not interested in debating whether or not this is good government policy. The reality is that the US Department of Justice - via the Federal Bureau of Prisons (BOP) and the US Marshalls Service (USMS)- accounted for approximately 25% of the total revenue for GEO and CXW. We realize that the political pendulum swings left and right, but we don’t see this policy reversing until 2024 at the earliest. GEO cannot afford to sit around and hope the political winds will eventually shift. The Company needs to be proactive in monetizing its assets on behalf of shareholders. We urge GEO to begin negotiations with the United States Bureau of Prisons (BOP) and United States Marshals Services (USMS) to sell or lease Company-owned facilities to these government entities. The USMS does not have any of its own detention facilities, so presumably it is going to need to buy or lease facilities in order to continue to operate.
The Board needs to adopt a mindset that private prisons are not a growth industry and adjust its corporate strategy accordingly

It is clear that private prisons will not be a growth industry for the foreseeable future. GEO should takes steps to shrink the Company and focus on enhancing intrinsic value per share, rather than absolute size metrics like total revenue or total beds in the portfolio. We find it absurd that GEO listed a desire to “internally fund growth” as a reason for suspending the dividend. There is no growth for the foreseeable future and the sooner the Board recognizes this, the better the prospects for enhancing shareholder value.

The tobacco industry is a great example of how good management can still create significant shareholder value despite a shrinking industry. In the past 10 years, Altria Group (NYSE:MO) has generated a total return of +226% whereas GEO has generated a loss of -20%, even after including all of the dividend payments.

We believe GEO needs to pivot its corporate strategy to maximize intrinsic value on a per share basis. We believe this can be achieved by monetizing its valuable assets that are currently idle or underutilized, eliminating growth capital expenditures, and developing a share repurchase strategy for when the balance sheet is properly deleveraged.
The value of GEO is now in its assets, not its future earnings

GEO’s stock price is currently trading at the highly distressed valuation of 3x cash flow. Clearly, “the market” does not believe the earnings power of the business is sustainable. Despite us being a GEO shareholder, we agree with “the market” that the earnings power of GEO has been impaired for the foreseeable future. That said, we do not believe the value of the Company’s assets have been meaningfully impaired. The intrinsic value of GEO is now derived from its assets, not its future earnings. We have identified 30 facilities that are either currently idle or contracted with the BOP or USMS that GEO should immediately seek to sell. These facilities encompass 24,200 beds and we believe GEO could monetize these assets for $1.9 – 2 billion. GEO currently has approximately $2.65 billion of net debt. Monetizing the assets we have identified would pay off the majority of the Company’s debt and still leave shareholders with a very profitable operating company that could initiate share buybacks or resume cash dividends. We believe our estimate of the value that GEO could unlock is conservative given the replacement cost of new detention facility construction and the fact that some of these properties are located in valuable urban cores such as San Francisco, Oakland, Queens NY, and Indianapolis.
GEO and the federal government can create a win/win outcome

If the federal government is going to eliminate contracts with private operators, it will need to increase its prison capacity. Our underlying assumption is that prison populations will increase from 2020 levels as the COVID impact wanes and will return to pre-pandemic levels over time. We believe GEO can offer the federal government an easy and cost-effective solution to its pending capacity squeeze by selling or leasing facilities to the government. We believe this would remove the “for profit” optics of the Company-owned & operated facilities.

The US government is notorious for inefficient spending and the BOP has kept that traditional alive. There have not been many new prisons built by the federal government in recent years, but the few that have been built or proposed have a price tag of 3-7x the implied replacement cost of the GEO portfolio. With GEO’s stock currently trading below $6 per share, the value of its Company-owned portfolio (56,534 beds) is approximately $59,500 per bed. The most recent facility built by the BOP, the FCI Danbury Female Camp, cost $181k per bed to build. The FCI Leavenworth facility in Kansas, which is currently being proposed as a replacement for the existing facility, will have a price tag equal to $252k per bed. These two facilities actually look like a bargain compared to the BOP Letcher County facility in Kentucky that was proposed at a cost of $420k per bed. Fortunately for tax payers, the Letcher County project was cancelled in 2019.

Exhibit A:

The most conservative comps for prison construction costs comes from the Office of the Inspector General’s audit of the Federal BOP’s prison construction program that took place in the early 2000’s. At the time, the BOP was building 13 prisons at an estimated cost of $1.6 billion (see Exhibit B). These projects in aggregate were built for a cost of $106,142 per bed. Adjusted for inflation, these construction costs would be $154,297 per bed today.

Exhibit B:

As shown in Exhibit A, the GEO portfolio is currently valued at a massive discount to its replacement cost. We urge GEO to immediately take steps to close this gap by monetizing non-core, underutilized, and at-risk assets. It would be much cheaper for the federal government to buy (or lease) existing facilities from GEO than it would be for them to build new ones. These government agencies are going to need capacity in the very near-term, so this should be a favorable environment for GEO to sell assets.

There are examples of the BOP buying existing prisons in the past. For example, the BOP purchased the Thomson Correctional Center (2,100 beds) from the state of Illinois in 2012 for $165m. This purchase price equated to a value per bed of $78,571 (Exhibit C). This transaction occurred in 2012 and is not adjusted for inflation. If we assume that the GEO portfolio is worth a similar amount on a per bed basis, the equity value of GEO is approximately $14.90 per share. We believe valuing the GEO portfolio at $78k per bed is conservative; this would equate to a 50% discount from our estimate of the inflation-adjusted costs of the BOP prisons that were built in early 2000’s ($154,297 per bed, see Exhibit A & B).

Exhibit C:

Our estimated value of $78k per GEO bed would result in an enterprise value of $4.4billion for GEO. We believe this value is reasonable given that GEO has traded at an average enterprise value of $5 billion over the past five years.

[kai-uwe]

Antwort auf Beitrag Nr.: 67.772.078 von lazy_invest am 11.04.21 20:24:25

Triple Net als Lösung

Die Lösung wird sein, dass man die Assets, also die Anstalten an die Behörden, die diese ja im Grunde dringend benötigen, verleast. Dann ist das politische Problem weg, dass Private die Häuser betreiben. Das Personal wird dann auch durch die Behörden übernommen. Möglicherweise wird auch verkauft statt verleast, um die Bilanz zu normalisieren. Ich meine, dass GEO pro Bett knappe 60.000 Dollar bilanziert hat. Ein Neubau würde aktuelle eher bei 160.000 Dollar je Bett kosten. Womöglich zieht die Bundesregierung hier nur so eine Show ab, um billig an die Assets zu kommen. Alles ein Pokerspiel.

[lazy_invest]

Antwort auf Beitrag Nr.: 67.764.913 von kai-uwe am 10.04.21 15:49:32

So ungefähr, ja. Würde eher mit dem AFFO minus pi mal Daumen 100 Mio. CapEx rechnen, also nur maximal 200 Mio., die jährlich zur Tilgung zur Verfügung stehen - Tendenz sinkend. Dafür muss aber auch weniger Geld aufgebracht werden, da man ja lediglich den Marktwert und nicht den Buchwert zahlt. Bei Rückkauf der Bonds zu 70% müsste man zur Tilgung von 1,5 Mrd. Schulden also nur etwas mehr als eine Mrd. bezahlen. Dauert dann trotzdem eine halbe Ewigkeit. Eine Entschuldung löst GEOs Probleme erstmal nicht, minimiert allenfalls etwas das Risiko und schafft durch Käufe unter Pari natürlich erst mal mehr Wert als eine Refinanzierung.

Der Case steht und fällt für mich aber mit den Problematiken bzgl. der Flüchtlinge im Süden und dass man die Insassen am Ende irgendwo unterbringen muss. Mittelfristig müssen entweder Verträge verlängert oder Assets von GEO aufgekauft werden. Davon gehe ich aus. Seht ihr noch andere realistische Alternativen?

[kai-uwe]

Oder schaut euch mal EPR an, ein REIT, der Ski- und Vergnügungsparks etc. betreibt sowie Kinos. Ich sehe da kurz bis mittelfristig kaum Aussichten, wieder profitabel zu werden und hatte meine Anteile mit der 2. Coronawelle im Oktober mit Verlusten abgegeben. Die Rahmenbedingungen wie Verschuldung etc. sehen noch ungünstiger aus als bei GEO. Und trotzdem hat sich EPR seit dem locker verdoppelt!!, ohne dass ich angesichts der Pandemielage einen Grund erkennen kann. Ich bleibe in GEO investiert, denn denselben Fehler mache ich kein zweites mal.

[kai-uwe]

Antwort auf Beitrag Nr.: 67.764.271 von freddy1989 am 10.04.21 14:07:21

Verschuldung abbauen

Ich denke mal die aktuellen Schulden von ca. 3,5 Milliarden Dollar müssten auf das 5-fache des EBITDA zurück geführt werden. Das EBITDA beträgt aktuell ca. 400 Millionen, rechnen wir mal mit 350 Millionen um die aktuell politisch schwierige Lage abzubilden: 3.500 Millionen minus Rückführungsnotwendigkeit = 5 x 350 Millionen. Also müssen gute 1,7 Milliarden abgebaut werden. Das heisst wir sind hier gute 4 Jahre mit dem Schuldenabbau beschäftigt. Anschließend haben wir wieder eine gesunde Bilanz und Neuwahlen, so dass eventuell die Republikaner ans Ruder kommen. Aber nochmal, wenn man gleich kleinere Brötchen gebacken hätte und nicht von 2013 bis 2020 gute 12 Milliarden!!! an Dividenden rausgehauen hätte sondern nur 10 Milliarden - dann hätten wir gar nicht das Problem, dass eine aktuell ungünstige politische Situation mit einer am Anschlag befindlichen Fremdkapitalquote zusammentrifft. Aber von Hoffnungslosigkeit würde ich nicht ausgehen. Andere REITs haben noch schlechtere Quoten. Nimm AFIN oder BPY - da werden noch höherere Werte vom Markt toleriert.

[MisterGoodwill]

Das sieht für mich schon sehr hoffnunglos aus v.a. angesichts der hohen YTM. Da kaufe ich lieber die schrottigen Eutelsat denen das Wasser nicht ganz so zum Halse steht.