Now and then, you have to make a choice as an investor.
Will you go with the growing narrative and follow Wall Street's departure from a specific asset due to public pressure, or will you swim directly where the money is and pick it up?
In this case, I'm talking about the U.S. prison industry.
The last few years have cast operators of private prisons as willing conspirators in a massive "prison complex" across the United States. The primary accusation is that operators of border detention centers and private prisons are profiting off mass incarceration.
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This narrative from more liberal activists has fueled a divesting of prison real estate investment trusts (REITs), the companies that operate private prisons.
The recent sell-off has pushed firms like the one I'll discuss today to an incredible discount and a hefty dividend that is hard to ignore (10.6%).
Today, I want to approach this subject by looking at the numbers. I'm not an advocate, and I'm not planning on owning this REIT in the future.
But I will make the case that this REIT is sharply undervalued due to a misplaced narrative driven by emotion over reason.
And you can decide for yourself if it's worth buying or not...
A Controversial - but Possibly Brilliant - Buy
About the Author
Garrett Baldwin is a globally recognized research economist, financial writer, and consultant with degrees from Northwestern, Johns Hopkins, Purdue, and Indiana University. He is a seasoned financial and political risk analyst, with a focus on stocks, hedge funds, private equity, blockchain, and housing policy. He has conducted risk assessment projects for clients in 27 countries, and consulted on policy and financial operations for some of the nation's largest financial institutions, including a $1.5 trillion credit fund, a $43 billion credit and auto loan giant, as well as two of the largest Wall Street banks by assets under management.
Garrett joined Money Map Press as an economist and researcher in 2011, specializing in alternative strategies with an emphasis on fundamental and technical analysis.