Do You Believe in the Upside Potential of The GEO Group (GEO)?

Meridian Funds, managed by ArrowMark Partners, released its “Meridian Hedged Equity Fund” first quarter 2025 investor letter. A copy of the letter can be downloaded here. The uncertainty surrounding prospective tariff policies weighed on investor sentiment and risk assets in the first quarter of 2025. The fund returned -0.15% (net) in the quarter compared to the S&P 500 Index’s -4.27% return and its secondary benchmark, the CBOE S&P 500 Buy/Write Index’s -3.09% return. In addition, you can check the fund’s top 5 holdings to determine its best picks for 2025.

In its first-quarter 2025 investor letter, Meridian Hedged Equity Fund highlighted stocks such as The GEO Group, Inc. (NYSE:GEO). The GEO Group, Inc. (NYSE:GEO) operates and manages secure facilities, processing centers, and community-based reentry facilities. The one-month return of The GEO Group, Inc. (NYSE:GEO) was 2.12%, and its shares gained 110.63% of their value over the last 52 weeks. On June 10, 2025, The GEO Group, Inc. (NYSE:GEO) stock closed at $26.96 per share, with a market capitalization of $3.811 billion.

Meridian Hedged Equity Fund stated the following regarding The GEO Group, Inc. (NYSE:GEO) in its Q1 2025 investor letter:

“The GEO Group, Inc. (NYSE:GEO) designs, finances, and operates correctional and detention facilities, as well as electronic monitoring and community-based programs, in partnership with federal, state, and local agencies. We invested in GEO because we see value in its stable operating model, underpinned by multi-year government contracts and a consistent demand for outsourced correctional and detention services. The company’s investments in electronic monitoring provide an additional avenue for growth, particularly through alternatives to large-scale detention programs. Notably, a recent 15-year agreement for a facility in New Jersey illustrates management’s ability to secure incremental, long term revenue streams and enhance cash flow visibility. We believe GEO is positioned to benefit from increased funding for Immigration and Customs Enforcement contracts, supported by expanded detention capacity and wider adoption of electronic monitoring. Furthermore, the company’s ongoing deleveraging has improved its capital structure, providing flexibility to pursue new contract wins amid rising demand tied to evolving border security and monitoring priorities.”

The GEO Group, Inc. (NYSE:GEO) is in 10th position on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 45 hedge fund portfolios held The GEO Group, Inc. (NYSE:GEO) at the end of the first quarter, which was 39 in the previous quarter. While we acknowledge the potential of The GEO Group, Inc. (NYSE:GEO) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the undervalued AI stock set for massive gains.

In another article, we covered The GEO Group, Inc. (NYSE:GEO) and shared billionaire Rob Citrone’s small-cap stock picks with huge upside potential. In addition, please check out our hedge fund investor letters Q1 2025 page for more investor letters from hedge funds and other leading investors.

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Disclosure: None. This article is originally published at Insider Monkey.