The Geo Group was highlighted in this months Smart Money along with two other companies in the sector. After doing a bit of digging, I believe that this is the best of the group.
Spread out in several different geographic regions, their growth is not limited to trends in any particular country, minimizing long-term risk. They also continue to post positive earnings growth as countries are mandating stiffer penalties for various offenses, especially drug related crimes. Geo has also branched into operating mental health facilities, so their earnings are not solely tied to prisons, though mental health only accounts for a small fraction of their revenues.
As the trend of longer incarcerations in tandem with swelling prison populations continues, GEO should continue to see profitable growth, though there will be a drop in share price after post-split trading commences in June. I would wait until after the split to establish a new position, as the record date is today.
$25.02 (05/15/07)
