Shares of Geo Group (GEO) and other “Trump” stocks are getting a boost today after the announcement of an aggressive 30-day legislation plan.
Incoming Senate Majority Leader had a closed-door meeting on Tuesday during which he laid out his plans to move quickly on several President-elect Trump’s agenda items. Senator Thune indicated that he will be pushing for two major partisan bills next term, including one within the first 30 days of the Trump administration.
Thune said the first of the two pieces of legislation, which would pass under a process known as budget reconciliation that can bypass the Senate filibuster, would focus on the border, defense and energy.
States have already started planning for the President-elect’s plan on border policy as several Governor’s have been in the headlines for the last week identifying the potential impact of Trump’s sweeping border policy and proposed deportation plans.
The effects are being felt in the market too as a specific group of stocks appear prepared for another launch higher.
Since the election, the list of Trump-related stocks has averaged +38% performance. The move outpaces the S&P 500 returns of just 6% along with the Nasdaq 100 returns of 6%.
The rally has everything to do with the potential for these stocks to benefit from policy changes in 2025.
But Senator Thume’s specific plan to level his legislative power on the border has immediate implications for a few specific stocks on the list, namely those operating in the detention and security industry.
Shares of both Geo Group (GEO) and CoreCivic (CXW) are trading higher again today as they prepare to break into another short-term rally.
Both Stocks have been consolidating for the last two weeks after a breakneck rally immediately following the November election. That consolidation served as what most technical traders would consider a “healthy correction”, clearing the way for another move higher.
Geo Group shares are moving more than 3% higher today in reaction to Senator Thune’s plan.
The administration's focus on aggressive immigration enforcement and expanding detention capabilities aligns perfectly with GEO's core business operations.
The company is a leading manager of private prisons and correctional facilities. That business is likely to see increased demand for its services and significant growth in contracts. The potential for expanded business comes as the government looks to further outsource detention services as part of the administration’s deportation plan.
Shares of GEO fell more than 10% over the last two weeks as shares dropped from $28.68 to $26.46.
That low price touched the stock’s 20-day moving average, what is referred to as the “Trader’s Trendline”. Shorter-term traders often take their cue from a stock gaining support from this trendline, providing a catalyst for higher prices.
Shares of Geo Group are trading in a bullish trend with the stock’s 50-day moving average in an ascending pattern that suggests the stock will continue higher over the next 4-6 weeks.
A break above $30 will drive even more bullish activity towards the stock as Trump’s legislative timeline becomes clearer.
Like Geo Group, CoreCivic, is one of the largest operators of private prisons and detention centers in the U.S..
CoreCivic is set to benefit from an anticipated rise in demand for detention facilities. Increased is likely to enhance its revenue streams and strengthen its operational performance.
CoreCivic's advantage is secured by the current political climate, which supports increased detention needs.
This enhanced market position suggests better financial performance and growth potential.
Shares of CoreCivic have seen a full 20% correction from their post-election highs. The more dramatic pullback in shares happened after the stock doubled in value in just one week of trading.
Shares of CXW are now breaking back above their “Trader’s Trendline”. This suggests that investors are stepping back into the stock following its correction.
A break above $25 will spark another strong rally, likely targeting $30.
