Is Olin Corporation (OLN) the best prison and law enforcement stock to invest in?
We recently compiled a list of the 10 Best Prison & Law Enforcement Stocks to Invest In. In this article, we'll take a look at where Olin Corporation (NYSE:OLN) stacks up against the other prison and law enforcement stocks.
The United Nations Office on Drugs and Crime (UNODC) reports “Prison Matters 2024: Global Prison Population and Trends; A Focus on Rehabilitation” found that, after declining during the COVID-19 pandemic, the global prison population rose to approximately 11.5 million in 2022, an increase of 5.5% since 2012. Despite this increase, the overall percentage of prisoners persons compared to the total world population has actually decreased, mainly due to faster population growth.
Overcrowding remains a major problem, affecting more than 60% of countries, raising serious concerns about the health and human rights of prisoners. Furthermore, there is an urgent need for better measures to prevent deaths in custody, as suicide accounts for over 10% of all deaths in prison. In some countries, prisons also face staff shortages, which can compromise safety and hinder rehabilitation efforts.
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The prison and law enforcement landscape is evolving, marked by significant trends and changes in policy. The use of technology in law enforcement is increasing, especially with artificial intelligence (AI) tools designed to streamline operations and reduce administrative burdens. As CNBC reported on November 26, many companies are stepping in to help police departments. For example, Truleo has developed an AI technology that automatically generates stories by capturing real-time voice notes from agents in the field. CEO of Truleo, Anthony Tassone, emphasizes that this method of generating police reports is both efficient and ethical.
Another company, 365Labs, focuses on improving the quality of police reports through AI-powered grammar and error correction. 365Labs CEO Mohit Vij acknowledges that while AI can help with basic writing tasks, human judgment remains crucial in serious incidents such as burglaries or assaults. This combination of technology and human oversight aims to increase law enforcement efficiency while ensuring officers can effectively serve their communities.
On November 11, CNBC reported that private prison stocks rose following President-elect Donald Trump's appointment of Tom Homan as his “border czar.” Homan, who led Immigration and Customs Enforcement (ICE) during Trump's first term, will oversee all deportation efforts for undocumented immigrants. Trump emphasized that Homan will manage security at the southern and northern borders, as well as maritime and aviation security.
Earlier, in July, Homan had stated that he planned to carry out an extensive deportation operation, claiming it would be the largest in American history. Analyst Isaac Boltansky of BTIG noted that a second Trump administration would likely expand contracts with the U.S. Marshals Service and the Federal Bureau of Prisons, suggesting a more aggressive approach to border enforcement that could benefit companies involved in immigration enforcement and detention services.
To create our list of the 10 best prison and law enforcement stocks to invest in, we used Finviz and Yahoo stock screeners to find the largest security and law enforcement companies. We also reviewed our own rankings and consulted several online sources. We carefully checked our list to remove companies that cannot be classified as prison and law enforcement stocks.
From an initial pool of more than twenty prison and law enforcement stocks, we focused on the top ten stocks most favored by institutional investors. Data on hedge fund sentiment around each stock comes from Insider Monkey's Q3 2024 database of 900 elite hedge funds. The 10 best prison and law enforcement stocks to invest in are ranked in ascending order by the number of hedge funds that have interests in them.
Why do we care what hedge funds do? The reason is simple: our research shows that we can outperform the market by imitating the best stock picks from the best hedge funds. Our quarterly newsletter strategy selects 14 small- and large-cap stocks each quarter and has returned 275% since May 2014, beating the benchmark by 150 percentage points (see more details here).
Pixabay/Public domain
Number of hedge fund holders: 33
Olin Corporation (NYSE:OLN) is a manufacturer and distributor of chemical products and a leading American ammunition manufacturer. Through its Winchester ammunition brand, the company produces and distributes sporting ammunition, law enforcement ammunition, reloading components, military ammunition and small caliber components, and industrial cartridges.
In the third quarter of 2024, the company reported revenue of $1.58 billion, compared to $1.67 billion in the same quarter last year. Olin Corporation (NYSE:OLN) faced challenges due to Hurricane Beryl, which impacted its operations and is expected to result in total losses of approximately $135 million by 2024. Despite these setbacks, Olin's Winchester segment showed Corporation (NYSE:OLN) resilience, with revenue increasing to $432.8 million, compared to $380.2 million in the third quarter of 2023. This growth was driven by increased military sales and the acquisition of White Flyer in Q4 2023, strengthening the company's position in recreational shooting. Notably, Winchester's military shipments and project revenues in Q3 2024 rose 35% sequentially.
In its Q3 2024 earnings call, Olin Corporation (NYSE:OLN) management shared that construction has begun on the Army's Lake City Next Generation Squad Weapon munitions facility. This fully funded project by the U.S. Army is expected to increase Winchester's revenues from its Lake City operations and increase the company's involvement in global defense initiatives. The new facility will support the production of advanced ammunition in line with the Army's modernization efforts and strengthen Winchester's position in the defense sector.
In short, OLN is in 6th place on our list of the best prison and law enforcement stocks to invest in. While we recognize OLN's potential as an investment, our belief lies in the belief that AI stocks hold greater promise for delivering higher returns in a shorter time frame. frame. If you're looking for an AI stock that's more promising than OLN but trades at less than five times earnings, check out our report on the cheapest AI stocks.
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Disclosure: None. This article was originally published on Insider monkey.
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