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Michael Burry’s stock pick to capitalize on US migrant crisis

Michael Burry's stock pick to capitalize on US migrant crisis

In mid-August, famed investor Michael Burry attracted investors’ attention when his Scion Asset Management firm disclosed a substantial purchase of 600,000 shares in Geo Group (NYSE: GEO), a company specializing in private prisons and mental health facilities. 

Following this revelation, GEO stock has surged by nearly 18%, further fueled by a bullish report from Citron Research.

But that may not be all for Geo Group’s stock market uptrend. Notably, the company may be in a position to extend its recent gains after the US House Committee on Appropriations passed a major bill to resolve the migrant crisis.

What happened?

Notably, in a bid to address the migrant crisis, the House passed a $92 billion bill that requires every non-detained alien to use a mandatory GPS tracking system.

“Ensure that every alien on the non-detained docket is enrolled in the Alternative to Detention Program with mandatory GPS monitoring throughout the duration of all applicable immigration proceedings (including appeals) and until removal if ordered.” 

– the bill states.

Importantly, 87% of this market is controlled by the Geo Group, according to Citron Research. Five million aliens matched this description in 2022, with that figure very likely being significantly higher this year, the firm added. 

In turn, Citron believes this could prove to be major bullish news for Geo Group investors.

“We expect the Senate to seek a compromise, but still, the numbers are off the charts.   $GEO finding solutions to the migrant crisis. Humane, affordable technology solutions…..Game Changer.”

– Citron Research noted.

In the wake of the bill’s approval, Geo’s shares could jump as high as $25, Citron said, which is thrice its current share price. 

Geo Group stock analysis

At press time, GEO was changing hands at $8.57, up 4.5% at the October 2 market open.

The stock gained more than 12.8% in the past five days and over 17% on the monthly chart, adding over $160 million in market cap over that period. 

GEO 1-month price chart. Source: Finbold

Year-to-date, the stock remains in the red at -22%. 

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