The stock market saw a surge of buying as the presidential election results favored Donald Trump on Wednesday morning.
Geo Group (GEO) stock was one of the more impressive standouts, notching gains of more than 40% before the market closed.
The GEO Group, Inc. is a company that specializes in providing privatized corrections, detention, and mental health treatment.
The company manages correctional and detention facilities while also supporting community reentry programs and electronic monitoring services.
The company is one of the largest operators of immigration detention facilities.
Geo Group was one of a focused portfolio of stocks that performed incredibly well in the first year of Donald Trump’s first tenure in the While House.
In 2016, Geo shares started a five-month rally that would see the stock move more than 120% higher from its lows. The rally was based on the outlook that then President Trump would take a hard line on privatizing the country’s detention systems.
It’s for that same reason that Geo Group has been historically volatile. The company’s business has been the target of debate among between republicans and democrats over the years.
In 2021, the Biden Administration issued an executive order aimed at phasing out the federal government's use of private prisons.
The stock suffered from the order, despite the fact that Geo Group has a heavier presence in the immigration detention business.
Shares of GEO shifted into an intermediate-term bull market trend just two weeks ago as Donald Trump was picking-up in certain polling numbers.
From a longer-term perspective, the stock shifted into a long-term bull market trend in late 2023 as it moved above its 20-month moving average.
With Geo Group closing above $20, investors should expect the next 6-12 months to attract more buyers targeting a price of $30.
Another beneficiary of Donald Trump’s presidential election win are the steel companies.
Shares of Steel Dynamics (STLD) were almost 14% higher at the close of trading, posting their best one-day performance in more than five years.
Steel Dynamics operates in the steel production and metals recycling industries.
They are one of the largest domestic steel producers and metal recyclers in the United States.
The company’s businesses include steel manufacturing, recycling and product fabrication such as steel building supplies. The company’s highly efficient and low-cost production models make it one of the more attractive companies in the industry.
New attention to tariffs on foreign products and materials puts Steel Dynamics – along with many in the industry – in an enviable position.
The potential for the U.S. economy to increase demand for steel and its products combined with potential tariffs may provide strong fundamental tailwinds for the next four years.
STLD stock has been trading in a relatively tight range for much of 2024 as investors awaited the results of last night’s elections.
From a long-term perspective, Steel Dynamics stock was already in a long-term bull market.
Shares of the steel maker have been trending above their 20-month moving average since shortly after the end of the COVID-19 pandemic. Since then, shares have appreciated by more than 450%.
Long-term investors may want to wait for today’s “froth” to come off of the stock for a better opportunity to buy at slightly lower prices.
That said, Steel Dynamics appears set to continue its long-term bull market rally with a price target of $200.
Green energy stocks were one of the few groups that took a hit from sellers following the election results.
The industry has been trading in a wide trading range that has been showing signs of weakness for the last 12 months as the election approached. Tuesday night's results, kicked the legs out from under these stocks, breaking their range.
Industry ETF such as the Solar ETF (TAN) and the Clean Energy ETF (ICLN) suffered 7% and 10% declines in a market that broadly traded 2-3% higher for the day.
Shares of Enphase (ENPH) dropped more than 16% for the day. That drop reached the November 2023 lows and indicates that the stock is likely headed to $50.
The decline is not solely due to market influences from the election.
Enphase Energy recently missed their earnings target on October 22nd.
For its most recent quarter, the company missed analysts’ expectations by $0.13 and showed revenue that was declining by 30% year over year.
Enphase shares had found support at $80.00 as recently as the day after the company’s poor earnings showing. In hindsight, those lows were simply the trigger for a short-term dead cat bounce.
Shares of. Enphase are likely to see short term support at round Number $70.00 per share.
That said, the long-term bear market trend for the stock is likely to prevail with a target price of $50 over the next 3-6 months.
