Stock of Private Prisons Booms Amid Latest Immigration Crisis CNN
go to original August 30, 2014

A detained undocumented migrant celebrates Mass for detainees at the Service Processing Center in El Paso, Texas. (Christian Fuchs/Jesuit Refugee Service)

There’s a crisis on the U.S.-Mexico border, and Wall Street is betting that it will result in a boom for private prisons.

Geo Group and Corrections Corporation of America are two of America’s largest for-profit prison operators. They have thousands of open beds, and they have deep relationships with the federal agencies charged with doling out contracts to house undocumented immigrants, including children.

“It’s highly likely that the federal government will have to turn to the private sector for help with this crisis. Both companies are extremely well positioned,” said Brian Ruttenbur, an analyst at CRT Capital Group who covers the stocks of Geo Group and Corrections Corporation of America.

Investors are clearly seeing dollar signs. Shares of both CCA and Geo Group have spiked since the border crisis landed on front pages this summer. CCA has climbed 8.5% since July 30, and Geo Group is up over 7%. That’s a lot better than the S&P 500’s 1.5% advance over that time span.

The Obama administration has already shifted over $405 million in funds to address the crisis and is urging Congress to pass a $3.7 billion emergency supplemental bill.

“Investors see this as an opportunity. This is a potentially untapped market that will have very strong demand,” said Alex Friedmann, an activist investor who owns shares of both CCA and Geo Group.

Read the rest at Fox News

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