Private prison stocks up 100% since Trump's win by Heather Long @byHeatherLong
February 24, 2017: 2:07 PM ET
Thanks to President Donald Trump, America's private prisons appear to be entering a gold age.
The stocks of the two biggest private prison operators -- CoreCivic (formerly know as Corrections Corp. of America) and Geo Group -- have doubled since election day. CoreCivic (CXW) is up 140% since Trump won in November; Geo Group (GEO) has risen 98%.
For all the talk about how good Trump has been for big banks like Goldman Sachs, he's been even better for private prison investors.
The reason private prisons are back in vogue is simple: Trump has made sweeping promises to crack down on crime and illegal immigration. Wall Street calculated quickly that Trump's rhetoric is likely to translate into more people behind bars. And that means more profits for private prisons.
"We're getting really bad dudes out of this country, and at a rate that nobody's ever seen before," Trump said Thursday.
Wall Street expects prisons to get the biggest boost from Trump's plans to deport illegal immigrants.
The Department of Homeland Security is already trying to hire 10,000 new immigration officers and 5,000 more border control agents. On top of that, DHS intends to ask for more money to fund additional detention facilities.
Both CoreCivic and Geo Group have several thousand beds currently available that could be used for undocumented immigrants, says Michael Kodesch, a stock analyst at Canaccord Genuity. Private prisons currently house roughly 8% of America's 1.5 million federal and state prison population, according to Kodesch.
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Poster Comment:
Que sera, sera.
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