Cartoon of the Weekend: Investing Club Meeting
Closed RTA Positions (* not a Position Monitor change):
4.1.22 - Buy Signal - Covering Short COLD $28.16 (LINK)
Ticker: CXW
Subsector: Specialty / Other (Detention Facilities)
Headline: Biden administration allowing Title 42 to expire in May
- Last Monday, 3/28 we added CoreCivic (CXW) at $10/share, formerly known as Corrections Corp., to the Long Bench on an identifiable near-term catalyst in the form of the Biden Administration potentially letting Title 42 expire. CXW is no longer a REIT, having converted back to a C-Corp 2 years ago, but has unique (and controversial) assets very relevant to the current situation at the southern border being amplified by the Ukrainian refugee crisis.
- We saw potential upside to ~$13/share, but what is most important here is that the RoC on occupancy, EBITDA, earnings and cash flow for CXW is highly likely to be inflecting positive over the next 2-3 quarters. We view this as a TREND duration long idea.
- CoreCivic operates 47 correctional and detention facilities (42 owned) encompassing ~70,000 beds, 26 residential re-entry centers encompassing ~5,000 beds, and 15 additional properties leased to government agencies. The company now stands at just ~3.7x levered, and is operating at sub-70% occupancy down from the low-to-mid 80% range throughout 2019.
- By way of background, Title 42 is a public health authority invoked by the CDC under the Trump administration in March 2020 as the COVID pandemic ramped, and allows border agents to turn away migrants seeking entry to "limit the introduction of communicable diseases." Without getting into the obviously thorny politics of the matter, which we do not want to do, Title 42 obviously negatively impacted CXW's bed utilization for transient migrants being processed by ICE, Border Patrol, etc. The CDC announced on Friday, 4/1 that Title 42 will be allowed to expire on May 23. This will add near-term bed demand for CXW's facilities.
- Shares were up +15% last week from where we added on the news, but we see additional upside from here.
Figure 1: Updated Position Monitor
PDF LINK
Figure 2: Updated Sentiment Monitor
PDF LINK
Figure 3: REIT Style Factor Exposure Performance
PDF LINK
Prior Notes:
4.1.22 - REITS DAILY BRIEF | 4.1.22 | (CPT, INVH)
3.31.22 - REITS DAILY BRIEF | 3.31.22 | (APARTMENT RENT TRACKER)
3.30.22 - REITS DAILY BRIEF | SELF-STORAGE ASSUMPTIONS | 3.30.22 | (CUBE, EXR, LSI, NSA, PSA)
3.27.22 - SUNDAY NIGHT REIT READ | 3.27.22 | (CXW, INVH, ONL, WE)
3.22.22 - REITS DAILY BRIEF | PGRE REJECTS MONARCH OFFER | 3.22.22 | (PGRE)
3.20.22 - SUNDAY NIGHT REIT READ | 3.20.22 | (INVH)
3.18.22 - REITS DAILY BRIEF | COLD REMAINS TOP SHORT IDEA | 3.18.22 | (COLD)
3.16.22 - REITS DAILY BRIEF | SFR ASSUMPTIONS SHEET | 3.16.22 | (AMH, INVH)
3.15.22 - REITS DAILY BRIEF | POSITION MONITOR UPDATE | 3.15.22 | (SUI)
3.13.22 - SUNDAY NIGHT REIT READ | 3.13.22 | (INVH)
3.11.22 - REITS DAILY BRIEF | POSITION MONITOR UPDATE | 3.11.22 | (WE)
3.9.22 - REITS DAILY BRIEF | 3.9.22 | (OFFICE UTILIZATION)
3.8.22 - REITS DAILY BRIEF | 3.8.22 | (APARTMENT RENT TRACKER, AMH, INVH, TCN, ILPT)
3.6.22 - SUNDAY NIGHT REIT READ | 3.6.22 | (WE)
3.4.22 - REITS DAILY BRIEF | POSITION MONITOR UPDATE | 3.4.22 | (WE)
3.4.22 - REITS DAILY BRIEF | 3.4.22 | (RADI MODEL UPDATE)
3.1.22 - REITS DAILY BRIEF | 3.1.22 | (WE)
3.1.22 - FOLLOWING UP W/ ADDITIONAL THOUGHTS ON HR | 2.28.22 | (HR, HTA)
2.28.22 - REITS DAILY BRIEF | POSITION MONITOR UPDATE | 2.28.22 | (HR, HTA)
2.27.22 - SUNDAY NIGHT REIT READ | 2.27.22 | (HR, HTA)
2.26.22 - UPDATE FOLLOWING MONARCH BID | POSITION MONITOR UPDATE | 2.26.22 | (PGRE)
2.24.22 - REITS DAILY BRIEF | 2.24.22 | (COLD 4Q21 RESULTS)
2.24.22 - UPDATE ON INVH COURT CASE | 2.24.22 | (INVH)
2.24.22 - REITS DAILY BRIEF | 2.24.22 | (PGRE)
2.23.22 - REITS DAILY BRIEF | POSITION MONITOR UPDATE | 2.23.22 | (INVH, COLD)
2.20.22 - SUNDAY NIGHT REIT READ (A LITTLE EARLY FOR FUN!) | 2.20.22 | (INVH SHORT)
2.17.22 - REITS DAILY BRIEF | POSITION MONITOR UPDATE | 2.17.22 | (INVH)
2.16.22 - REITS DAILY BRIEF | POSITION MONITOR UPDATE | 2.16.22 | (UHAL)
2.15.22 - INVH 4Q21 RESULTS | JUST NOT ENOUGH | 2.15.22 | (INVH)
2.13.22 - SUNDAY NIGHT REIT READ - SUPER BOWL EDITION | 2.13.22 | (UHAL)
2.11.22 - REITS DAILY BRIEF | 2.11.22 | (OFC 4Q21 RESULTS)
2.10.22 - REITS DAILY BRIEF | 2.10.22 | (REXR 4Q21 FOLLOW-UP)
2.9.22 - REXR'S FY22 OUTLOOK DISAPPOINTING | 2.9.22 | (REXR)
2.9.22 - REITS DAILY BRIEF | 2.9.22 | (EGP)
2.8.22 - REITS DAILY BRIEF | 2.8.22 | (REXR, APARTMENT RENT TRACKER)
2.6.22 - SUNDAY NIGHT REIT READ | 2.6.22 | (RADI)
2.4.22 - EVENT REPLAY | RADIUS GLOBAL INFRASRUCTURE (RADI) BLACK BOOK
2.2.22 - AVB FY22 GUIDANCE CONSERVATIVE | 2.2.22 | (AVB)
2.1.22 - EQR 4Q21 EARNINGS BEAT | 2.1.22 | (EQR)
1.31.22 - POSITION MONITOR UPDATE | 1.31.22 | (O, NNN, WY, CUBE, LSI)
1.30.22 - SUNDAY NIGHT REIT READ | 1.30.22 (AVB, EQR, WE)
1.27.22 - EVENT INVITE | RADIUS GLOBAL INFRASRUCTURE (RADI) BLACK BOOK | FRIDAY, 2/4 @ 10:00AM ET
1.27.22 - REITS DAILY BRIEF | 1.27.22 | (OFC)
1.26.22: REITS DAILY BRIEF PART II | 1.26.22 | (RADI)
1.26.22 - REITS DAILY BRIEF | 1.26.22 | (COLD)
1.25.22 - REITS DAILY BRIEF | 1.25.22 | (APARTMENTS, OFFICE UTILIZATION)
1.25.22 - Will $MSTR Be Forced To Sell Their Bitcoin? (Bonus)
1.23.22 - SUNDAY NIGHT REIT READ | 1.23.22
1.22.22 - REITS DAILY BRIEF | 1.21.22 | (COLD)
1.21.22 - REITS DAILY BRIEF | 1.19.22 | (AMH, WE)
1.19.22 - REITS DAILY BRIEF | 1.19.22 | (PLD, COLD)
1.17.22 - MONDAY NIGHT HOLIDAY REIT READ | 1.17.22 (RADI, PLD)
1.12.22 - REITS DAILY BRIEF | 1.12.22 | (APARTMENT RENT TRACKER)
1.11.22 - REITS DAILY BRIEF | 1.11.22 | (POSITION MONITOR UPDATE)
1.10.22 - REITS DAILY BRIEF | 1.10.22 | (WE, REXR)
1.9.22 - SUNDAY NIGHT REIT READ | 1.9.22
1.6.22 - REITS DAILY BRIEF | 1.6.22 | (PSA, POSITION MONITOR)
1.5.22 - ESRT <--> PGRE: A WIN-WIN ALL AROUND? | 1.5.22 | (ESRT, PGRE)
1.4.22 - REITS DAILY BRIEF | 1.4.22 | (PGRE)
1.3.22 - REITS DAILY BRIEF | 1.3.22 | (POSITION MONITOR UPDATE, PGRE)
12.29.21 - REITS DAILY BRIEF | 12.29.21 | (Position Monitor, TCN, DLR, EQIX, ELS, SUI)
12.23.21 - REITS DAILY BRIEF | 12.23.21 | (AVB, CPT, EQR, MAA)
12.21.21 - REITS DAILY BRIEF | 12.21.21 | (BRG, U.S. OFFICE UTILIZATION)
12.19.21 - SUNDAY NIGHT REIT READ | 12.19.21 | (PSA)
12.17.21 - REITS DAILY BRIEF | 12.17.21 | (Storage, Manhattan Office)
12.16.21 - REITS DAILY BRIEF | 12.16.21 | (FR)
12.15.21 - EVENT REPLAY | FIRESIDE CHAT W/ WEWORK CEO SANDEEP MATHRANI
12.14.21 - REITS DAILY BRIEF | 12.14.21 | (U.S. OFFICE UTILIZATION)
12.12.21 - SUNDAY NIGHT REIT READ | 12.12.21 | (WE)
12.11.21 - EVENT REMINDER | FIRESIDE CHAT W/ WEWORK CEO SANDEEP MATHRANI
12.10.21 - REITS DAILY BRIEF | 12.10.21 | (ESRT)
12.8.21 - REITS DAILY BRIEF | 12.8.21 | (APARTMENT RENT TRACKER, U.S. OFFICE UTILIZATION)
12.7.21 - REITS DAILY BRIEF | 12.7.21 | (SLG)
12.6.21 - REITS DAILY BRIEF | 12.6.21 | (WE NOVEMBER OPERATIONS UPDATE)
12.5.21 - SUNDAY NIGHT REIT READ | 12.5.21 | (PGRE, EGP, PLYM, MAA, CPT, O, EPR)
12.2.21 - REITS DAILY BRIEF | 12.2.21 | (WE)
12.1.21 - IGNORE CNBC RE: WEWORK RESTATEMENT | 12.1.21 | (WE)
12.1.21 - REITS DAILY BRIEF | 12.1.21 | (U.S. OFFICE UTILIZATION, WE)
11.30.21 - REITS DAILY BRIEF | 11.30.21 | (AMH)
11.28.21 - SUNDAY NIGHT REIT READ | 11.28.21 | (COLD)
11.23.21 - REITS DAILY BRIEF | 11.23.21 | (U.S. OFFICE UTILIZATION, WE)
11.21.21 - SUNDAY NIGHT REIT READ | 11.21.21 | (WE)
11.19.21 - REITS DAILY BRIEF | 11.19.21 | (CUBE)
11.17.21 - REITS DAILY BRIEF | 11.17.21 | (STYLE FACTOR WORK)
11.16.21 - REITS DAILY BRIEF | 11.16.21 | (U.S. OFFICE UTILIZATION)
11.15.21 - CUBE ANNOUNCES STABILIZED ACQUISITION | 11.15.21
11.15.21 - REITS DAILY BRIEF | 11.15.21 | (WE, ILPT)
11.14.21 - SUNDAY NIGHT REIT READ | 11.14.21 | (CUBE, EXR, LSI, NSA)
11.11.21 - REITS DAILY BRIEF | 11.11.21 | (LSI, NYC CBD OFFICE)
11.10.21 - REITS DAILY BRIEF | 11.10.21 | (UHAL, CONE, COR, NSA, PSA)
11.9.21 - REITS DAILY BRIEF | 11.9.21 | (U.S. OFFICE UTILIZATION, SFR)
11.7.21 - SUNDAY NIGHT REIT READ | 11.7.21 | (APARTMENT RENTAL RATE TRACKER, POSITION MONITOR UPDATE)
11.4.21 - REIT RECAP | 11.4.21 | AMH 3Q21 RESULTS
11.4.21 - REIT RECAP | 11.4.21 | CUBE 3Q21 RESULTS
11.4.21 - REITS DAILY BRIEF | 11.4.21 | (COLD, IRM, EARNINGS SURPRISE MONITOR)
11.3.21 - REITS DAILY BRIEF | 11.2.21 | (LSI, POSITION MONITOR UPDATE)
11.2.21 - REITS DAILY BRIEF | 11.2.21 | (PSA, U.S. OFFICE UTILIZATION)
11.1.21 - REIT RECAP | 11.1.21 | PSA 3Q21 RESULTS
10.31.21 - SUNDAY NIGHT REIT READ | 10.31.21 | (3Q21 EARNINGS SURPRISES, POSITION MONITOR)
10.28.21 - REIT RECAP | 10.28.21 | CPT 3Q21 RESULTS
10.28.21 - REITS DAILY BRIEF | 10.28.21 | (EXR)
10.28.21 - REIT RECAP | 10/28/21 | INVH 3Q21 RESULTS
10.28.21 - REIT RECAP | 10/27/21 | AVB 3Q21 RESULTS
10.27.21 - REITS DAILY BRIEF | 10.27.21 | (3Q21 Earnings, AVB, EXR, Office)
10.26.21 - REIT RECAP | 10/26/21 | EXR 3Q21 RESULTS
10.26.21 - REITS DAILY BRIEF | 10.26.21 | (EQR, REXR)
10.25.21 - SUNDAY NIGHT REIT READ | 10.24.21 | (POSITION MONITOR)
10.21.21. - REIT RECAP | 10/21/21 | REXR 3Q21 RESULTS
10.20.21 - REITS DAILY BRIEF | 10.20.21 | (EGP, PLYM, REXR, ILPT)
10.19.21 - VIDEO | American Homes 4 Rent (AMH) Thesis
10.19.21 - REITS DAILY BRIEF | 10.19.21 | (COLD, SLG, VNO, AMH, U.S. Office Utilization)
10.18.21 - REITS DAILY BRIEF | 10.18.21 | (PLD)
10.17.21 - SUNDAY NIGHT REIT READ | 10.17.21 | (PLD, POSITION MONITOR)
10.15.21 - REIT RECAP | 10/15/21 | PLD 3Q21 RESULTS
10.13.21 - REITS DAILY BRIEF | 10.13.21 | (PLD)
10.10.21 - SUNDAY NIGHT REIT READ | 10.10.21 | (POSITION MONITOR UPDATE)
10.8.21 - BLACK BOOK ROUND-UP | AMERCO (UHAL)
10.7.21 - BEST IDEA ROUND-UP | AMERICOLD REALTY TRUST (COLD)
Please e-mail with any questions.
Rob Simone, CFA
Managing Director
Twitter: @HedgeyeREITs
