June 20, 2018 / 10:11 PM / 3 months ago

Prison operator shares rise on Trump immigration executive order

NEW YORK (Reuters) - Shares of prison operators CoreCivic Inc and Geo Group Inc jumped on Wednesday on investor speculation that they could benefit from an executive order signed by U.S. President Donald Trump to end the separation of immigrant children from their parents at the U.S.-Mexico border.

The order requires immigrant families to be detained together when they are caught entering the United States from Mexico illegally, for as long as their criminal proceedings take. It also moves parents with children to the front of the line for immigration proceedings.

CoreCivic shares ended up 3.5 percent, their largest one-day percentage gain since April 3. Geo Group shares rose 1.8 percent, their biggest one-day percentage gain since May 3.

The administration must determine where to house families that are detained together, possibly for long periods, and how to reunite families that already have been separated.

The executive order could increase the need for capacity at U.S. Immigration and Customs Enforcement (ICE) family detention centers, said Jamie Cuellar, co-portfolio manager of the Buffalo Small Cap Fund, which owns CoreCivic shares. That greater need could bring more business to both prison operators, which operate ICE family detention centers.

“This means another growth opportunity, more funding for more beds, and they’d provide programing they’d be offering to kids in detention and they’d get paid for it,” said Cuellar, who is based in Mission, Kansas.

Services for children, such as education and play spaces, would bring in additional revenue, Cuellar said.

None of Geo Group’s facilities have housed unaccompanied children, Pablo Paez, the company’s executive vice-president of corporate relations, wrote in an email to Reuters.

Reuters was unable to reach CoreCivic for comment.

CoreCivic said in a statement earlier on Wednesday that its facilities do not house children who have been separated from their parents.

“It’s important to note that, under long-standing policy, CoreCivic does not advocate for or against legislation or policies that determine the basis for or duration of an individual’s detention,” CoreCivic’s statement read. “We also do not enforce immigration laws or policies or have any say whatsoever in an individual’s deportation or release.”

Reporting by April Joyner and Sinéad Carew in New York; Editing by Alden Bentley and Grant McCool

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below