(this was originally posted at OhioBudgetWatch.com by Budget Watcher, but I thought it provided such great insight into Kasich’s corporate giveaways that it deserved to be re-posted here…)

I know we’ve talked about this budget as though it’s all gloom and doom with its privatization, layoffs and local tax increases it will generate. But why dwell on the negative, when you too can profit from this budget?

If you have an E-Trade account and cash to invest, here are a few publicly-traded companies who are positioned well to profit from Ohio’s recently enacted budget*.

Prison Privatization – with five prisons on the auction block thanks to the budget, and GOP legislatures in other states pushing the same pro-privatization agenda, private prison operations is sure to be a big growth industry. Two of the three major players in this arena are publicly-traded firms:

  • Corrections Corporation of America (CXW) – while the company has a poor track record of running private prisons in Ohio, it has to be considered to have the inside track now, as the Governor’s pick for Corrections Chief is a former CCA executive.
    Revenue: $1.7B, quarterly revenue growth: 5.5%, profit margin: 9.58%, price to earnings ratio: 14.7
  • GEO Group (GEO) – the company saw its stock price drop as sentencing reform in California led the state to cancel contracts with three GEO-owned and operated facilities there. The policy change sends more prisoners to the county level, where overcrowded conditions give the company hope that it can market the three facilities to the county instead. So, fear not, potential investors, one way or another, these profiteers will find a way to make money off of incarcerations.
    Revenue: $1.37B, quarterly revenue growth: 36.3%, profit margin: 4.56%, price to earnings: 19.7

Drilling on Public Lands – the budget included a provision to expand oil and gas drilling to state parks. the provision was later removed but passed in separate legislation, so we’re going to count it as a budget-related profit opportunity. There’s really only one major player to watch:

  • Chesapeake Energy (CHK) – this is the major player in what’s known as utica shale, a resource that is abundant in parts of eastern Ohio. The Dayton Daily News reports the company has bought up $1 billion worth of leases, with 120 leasing agents operating statewide. Just today, the company announced a major find in Ohio, something the Governor’s office was quick to applaud. This is a great hedge against any money you might lose if you own property near a Chesapeake drilling site, since the water quality is bound to deteriorate thanks to the fracking methods they employ.Revenue: $8.18B, quarterly revenue growth: -42.4%, profit margin: 10.68%, price to earnings: 28.19

Medicaid Managed Care – representing the largest single area within the state budget, Medicaid continues to grow as all other parts of the budget shrink. And the Governor’s budget shifts more medicaid patients, including disabled kids, the mentally ill and nursing home patients into managed care plans, sending billions of dollars to a handful of managed care organizations that contract with the state. While Caresource is the largest player in Ohio’s program, it is a privately-held company, so sadly you cannot get in on this money train. Instead, consider one  of the other publicly-traded managed care companies that profit from the Ohio Medicaid population:

  • Amerigroup (AGP)
    Revenue: $5.97b, quarterly revenue growth: 12.3%, profit margin: 5.05%, price to earnings ratio: 11.32
  • Centene Corp (parent of Buckeye Community Health Plan) (CNC)
    Revenue: $4.61B, quarterly revenue growth: 13.4%, profit margin 2.05%, price to earnings: 19.02
  • Molina Healthcare (MOH)
    Revenue: $4.24B, quarterly revenue growth: 15.8%, profit margin: 1.46%, price to earnings: 16.51
  • United Healthcare (parent of Unison Health Plan) (UNH)
    Revenue: $96.39B, quarterly revenue growth: 9.7%, profit margin: 4.97%, price to earnings: 11.64

There are likely dozens more just like these if you do a little research. Turnpike and Lottery privatizations, Casino operators, breathalyzer manufacturers (thanks to the Ohio House of Representatives!), just to name a few.

Just because your school district and local government got hosed, don’t assume it’s only the rich guys who will profit from this budget. If you act fast, there’s no reason you too can’t have a piece of the action.

 

*note: we are not professional investment advisers; you would be stupid to take financial advice from a blog.

 
  • Thanks for the  info, LOL! You are a complete blog with personal  financial information and you cover sports.

    Only in America would people think that corporate bureaucracy would run stuff better than the government. Hey why work hard when the American people will pay you to do their jobs and not be responsible for the mess afterwards.

    Yes, we should run our country like Lehman Brothers…..NOT.

    Look how well that turned out.

  • luv2teach

    Oh now I get it! Kasuck totally obliterates the public schools which in turn contributes to the creation of more criminals which increases the need for more prisons! Wow… his prison-owning buddies must really love him! He makes me want to puke!

  • I’m sorry but I didn’t sign up to be a part of the Unitied States of Lehman Brothers. Running the government is not like running a business. They serve different functions. How do we know that they are going to do the job with my tax payer money instead of just funneling it to their investors? Their motive is profit not public good. Look at all of the disasters that have happened when we have unfettered corporate buraucracy run amok. Yeah, we should run our government like BP, Lehman Brothers, Goldman Sachs. Exxon-Mobil….all are examples of putting profit before people and significant corporate immorality. They and many others have robbed and wrecked our country without one I’m sorry or fixing their mistakes. They just buy the politicians and change the laws to make what was illegal legal and to continue to rob us. 

    We have a duty, no a responsibility to pay for our rights and freedoms. We have for too long abdicated our responsibility because the rotten R’s demonize governmental functions. 

     To me is a recipe for fraud and cronyism without getting what we pay for. Since the American taxpayer doesn’t understand that we can’t get something for nothing, it is a prescription for the continuing robbery of me and mine. 

    We need good government not government by corporations who only work for “investors”. 

  • Yup exactly. Instead, it would be cheaper to pay for school. But that would interfere with corporate robbery of us…ooops I mean profit making. 

  • Not pursuaded.

    Agree to disagree but not be disagreeable.

  • Ted

    UPS is United Parcel. USPS is the Post Office. The USPS is required to break even every 5 years. The GAO found 75 BILLION dollars of the USPS’s money and will not return it. The USPS is the only agency in the US to be required to prefund retiree health care to the tune of 5.5 BILLION dollars.

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