Former Acting Director of Immigration and Customs Enforcement, Tom Homan, addressed a daily press briefing at the White House in Washington, D.C., on June 28, 2017. On Monday, President-elect Donald Trump appointed Homan as the nation’s next “border czar,” which led to a significant rise in private prison stocks.
Private prison stocks surge
On Nov. 11, private prison stocks surged after President-elect Trump named immigration hardliner Homan as the incoming “border czar.”
Following Homan’s pledge to manage what he described as the largest deportation operation in the nation’s history, GeoGroup stock increased by 4.5%, while CoreCivic saw a 6.3% rise.
Homan is widely recognized for his previous role during Trump’s first term as head of Immigration and Customs Enforcement.
1 million undocumented migrants under threat
Trump expressed familiarity with Homan’s abilities, stating on Truth Social that he believed no one was better suited for overseeing border security. Vice President-elect JD Vance indicated they could begin by targeting 1 million undocumented migrants and increase efforts from there.
After Trump’s recent election victory, analysts anticipated a strong market rally for these two stocks.
Isaac Boltansky, a BTIG analyst, informed clients on Nov. 6 that Trump’s return to the White House would likely result in greater support for GeoGroup and CXW, accompanied by a more assertive approach to border enforcement that would impact ICE-related operations for these firms.
Private prison stocks mark best week
Last week, both GeoGroup and CoreCivic experienced a notable increase, marking one of their best weeks since Trump’s 2016 election. Trump’s campaign promises included a crackdown on crime and illegal immigration.
CoreCivic, a company specializing in the ownership, leasing, and management of correctional facilities, saw an 88% rise last week before settling with a 69% weekly gain. GeoGroup’s stock also climbed nearly 76% post-election.
Unprecedented opportunity
During an earnings call last Thursday, GeoGroup founder and chairperson George Zoley referred to the situation as an “unprecedented opportunity.”
Zoley outlined that GeoGroup had 18,000 available beds across various secure service facilities, which, if fully utilized, could significantly improve financial performance. He emphasized that the company was designed for this pivotal time in both the company’s and the country’s history and anticipated the opportunities it would bring.
Read More: South Dakota Gov Kristi Noem Picked By Trump For Homeland Security Secretary
