Two companies that operate detention facilities in the U.S. are breaking out.
Donald Trump's victory in the presidential elections helped shares of Corrections Corp. rise as much as 60 percent before paring their surge to 34 percent by 10:14 a.m. in New York, while GEO Group Inc. was trading 18 percent higher by the same time.
Those moves mean the stocks have recouped some of the losses they've registered since August, when the Department of Justice said it would start phasing out privately run jails. Analysts say President Trump would be likely to reverse that policy, and see an added windfall to the companies stemming from the difficulty of implementing his deportation agenda.
"Private prisons would likely be a clear winner under Trump, as his administration will likely rescind the DOJ's contract phase-out and ICE capacity to house detainees will come under further stress." analysts at Height Securities LLC wrote in a note published this morning, referring to the Immigration and Customs Enforcement body by its acronym. Mass deportation of illegal immigrants would be likely to run into legal obstacles, "further necessitating a sizable contract detention population," the analysts said.
The Republican nominee has been endorsed by the National Immigration and Customs Enforcement Council, the union that represents U.S. customs and immigration officials, and even the President-Elect's campaign rallies were characterized by chants of "Lock her up," aimed at his Democratic opponent.
“While we admittedly have little insight into how” a Donald Trump-supervised Justice Department would handle for-profit prisons, "our sense is that a reversal of this policy would be likely,” Compass Point analyst Isaac Boltansky wrote at the time of the August decision.