Trump 2.0’s biggest market winner is a federal immigration contractor
Revenues from ICE accounted for nearly half of Geo Group’s sales in 2023, and the outlook for that business is improving in light of the election results.
GEO Group was the single biggest winner in the US stock market — among companies of any size — on Wednesday, after Donald Trump prevailed in his bid to return to the White House. Oft described with the shorthand “private prison company,” Geo Group generates a substantial portion of sales through its immigration, detention, processing, and deportation contracting business.
The company also just so happened to report lackluster earnings this morning. It posted top- and bottom-line results that failed to impress, relative to Wall Street forecasts, but this had little impact on its shares.
That’s because today’s numbers are largely beside the point when it comes to explaining the 40% jump the shares saw Wednesday.
Investors are clearly making a bet that Trump 2.0 will result in a surge of federal dollars toward Geo Group, which offers investors a strangely remarkable level of exposure to profiting from the US immigration and border-enforcement infrastructure.
Some 72% of revenue for the company, based in Boca Raton, Florida, came from its Secure Services division, which at the end of last year oversaw some 50 detention and residential facilities with about 65,000 beds, including centers run on behalf of the US Marshals Service and the US Immigration & Customs Enforcement. In 2023, contract revenues from Immigration & Customs Enforcement accounted for 43% of the company’s total top line.
The company also operates an Electronic Monitoring and Supervision Services segment that contracts with the feds to help operate the government’s Intensive Supervision Appearance Program, or ISAP, on behalf of ICE. That’s a program that basically keeps track of people as they undergo the immigration review process. Geo’s transportation division operates a fleet of buses and employs hundreds of security officers to oversee deportations on behalf of the federal government.
The Trump administration’s plans for concrete changes to the US immigration system are not yet clear. But as the AP reports, attitudes toward immigration — along with inflation — were the key catalysts behind his decisive victory over Vice President Kamala Harris, suggesting expectations are high for the incoming administration to act on those issues.
So, business is likely to pick up at Geo.
