market folly

Bill Ackman's hedge fund Pershing Square Capital Management recently revealed their long position in shares of Corrections Corporation of America (CXW). At the Value Investing Congress, Ackman labeled CXW as 'one of the best real estate businesses around.' He also said that it could potentially make a nice pairs trade. While he didn't intend it to be this way upon execution, his short position in Realty Income (O) was also recently revealed a few weeks ago and he thinks it makes a nice short to complement the CXW long. (You can also view Ackman's presentation on Realty Income).

Embedded below you will find the presentation Ackman gave on CXW at the Value Investing Congress:



Also, you can download the .pdf here.


We also wanted to note that Pershing Square filed a 13G with the SEC on Corrections Corp of America (CXW) recently as well. They filed due to activity on October 20th, 2009 and have disclosed a 9.5% ownership stake with 10,936,672 shares. And obviously this is a brand new position for them as they did not show ownership on their previous 13F filing when we examined Pershing's portfolio. For more on Ackman & Pershing, make sure to check our in-depth profile. While Ackman presented his long case for CXW at the Value Investing Congress, numerous other prominent hedge fund managers also presented investment ideas which we covered. It was definitely an interesting mix and we'll have to see how each manager's pick pans out.

Taken from Google Finance, Corrections Corp is "an owner and operator of privatized correctional and detention facilities, and a prison operator in the United States. The Company operates 64 correctional and detention facilities, including 44 facilities that it owns, with a total design capacity of approximately 85,000 beds in 19 states and the District of Columbia. Corrections Corporation of America also owns three additional correctional facilities that it leases to third-party operators. The Company specializes in owning, operating, and managing prisons and other correctional facilities, and providing inmate residential and prisoner transportation services for governmental agencies. In addition to providing the fundamental residential services relating to inmates, its facilities offer a variety of rehabilitation and educational programs, including basic education, religious services, life skills and employment training and substance abuse treatment."