Bank of America is out with an interesting defense on Corrections Corporation of America (NYSE:CXW) noting that over the past week, they have not come across any negative news items or concerns that would justify the -11.6% move in CXW’s stock (versus +0.3% for the S&P500).

Actually, to the contrary, siance its presentation at their conference (Sep 16), there have been several positive data points from CA that they believe provide incremental visibility into earnings over the next several quarters while also eliminating the CA overhang concerns from last quarter’s earnings call in early Aug.

Positive CA data points: 1) inmate re-ramp at Tallahatchie facility in sight (incremental EPS visibility into 4Q while eliminating overhang concerns from 2Q earnings call); 2) inmate transfers since Aug 1 running at levels that are in-line with 1H08 levels (which they believe is above management’s expectations); and 3) CA budget signed with no material changes to CDCR’s operating budget (versus January’s proposal).

Firm would use recent weakness, which they believe to be unfounded, as a buying opportunity. They believe the recent string of positive data points from CA point to greater earnings visibility through 2009 and highlight a CA-based catalyst roadmap through year-end.

Reits Buy and $32 tgt, offering potential 37% return.

Notablecalls: May get a bounce out of this one.