- When it comes to stocks, our preference is towards not making mistakes rather than making bold calls, and as such we would avoid GEO and prisons in general without hedges.
- The risks to GEO are political and well-known; however, we think that investors need to pay attention to possible chains of events that could lead to poor capital returns.
- De-reiting is one issue for GEO, and peers have already made the decisions to do so which is a concession that will lead to a worse business condition.
- Political shocks could seriously damage GEO's business, and they are rather exposed to some likely ones.
- Even without dramatic events, general mid-term trends point towards the downside.
For further details see:
GEO Group: Political Risks Make It A Possible Portfolio Mistake