GEO Shares Down 44% as Fund Sells $9 Million in Stock Amid ICE Allegations and Softer Outlook
Key Points
New York City-based Apis Capital Advisor sold 394,000 shares of GEO in the third quarter for an estimated $9 million.
Apis Capital Advisors now holds 860,000 GEO shares valued at $17.6 million.
GEO accounts for 3.9% of fund AUM, placing it outside the fund's top five holdings.
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New York City-based Apis Capital Advisors reported a sale of shares in GEO Group (NYSE:GEO) in its November 14 SEC filing, reducing its position by an estimated $12.4 million during the third quarter.
What Happened
According to an SEC filing on November 14, Apis Capital Advisors trimmed its stake in GEO Group (NYSE:GEO) by selling 394,000 shares during the third quarter. The estimated transaction value of the shares sold was $9 million based on quarterly average pricing. Post-transaction, the firm’s GEO position was 860,000 shares, worth $17.6 million at the end of the quarter.
What Else to Know
This sale brings GEO to 3.9% of Apis Capital Advisors' 13F reportable AUM, which places it outside the fund's top five holdings.
Top holdings after the filing:
- NASDAQ:CELC: $38.3 million (8.5% of AUM)
- NASDAQ:TLN: $32.5 million (7.2% of AUM)
- NASDAQ:SIMO: $27.1 million (6% of AUM)
- NASDAQ:SSRM: $27.1 million (6% of AUM)
- NASDAQ:STX: $27 million (6% of AUM)
As of Wednesday's market close, GEO shares were priced at $15.58, down 44% over the past year and far underperforming the S&P 500, which is up 13% in the same period.
Company Overview
| Metric | Value |
|---|---|
| Price (as of market close Wednesday) | $15.58 |
| Market capitalization | $2.2 billion |
| Revenue (TTM) | $2.5 billion |
| Net income (TTM) | $238.1 million |
Company Snapshot
GEO Group is a leading provider of secure facility management and community reentry services, with a diversified revenue base across the U.S. and international markets. The company leverages its expertise in security, rehabilitation, and compliance technologies to deliver integrated solutions for government clients. Its scale, recurring contract structure, and breadth of service offerings support a stable operating model in the correctional and supervision services industry. The company serves federal, state, and local government agencies in the United States and select international markets, targeting correctional, law enforcement, and immigration authorities.
Foolish Take
For long-term investors, a position trim in a high-volatility name like GEO is most useful as a sentiment signal—not a verdict on fundamentals. The company just issued a softer fourth-quarter outlook and continues to face litigation over detainee pay, yet it also reported better-than-expected third-quarter results and reaffirmed major contract wins that reshape its revenue base for 2026.
According to Apis' latest SEC filing, the manager sold 394,000 shares of GEO during the third quarter, bringing its stake to 860,000 shares valued at $17.6 million. As the filing notes, GEO is no longer a top-five holding—a meaningful shift given the portfolio’s concentrated profile and the fact that GEO was previously the top holding by value.
The stock has really struggled: Shares are down 44% over the past year and have lagged despite revenue rising 13% year-over-year. Meanwhile, guidance tightened for the fourth quarter, with GEO projecting GAAP net income of $0.23 to $0.27 per share on $651 million to $676 million of revenue. Litigation also remains a real overhang—the company recorded a $37.7 million non-cash reserve tied to claims of detainees in the custody of U.S. Immigration and Customs Enforcement—but management continues to highlight major 2026 growth drivers, including 6,000 newly contracted ICE beds and expanded transportation services.
Glossary
13F reportable assets under management: The total value of securities a fund must disclose quarterly to the SEC on Form 13F.
Assets under management (AUM): The total market value of investments managed by a fund or investment firm.
Top holdings: The largest investments in a fund’s portfolio, typically by market value or percentage of AUM.
Quarterly average pricing: The average price of a security over a specific quarter, used to estimate transaction values.
Correctional and detention management: Services related to operating prisons, jails, or detention centers, often under government contract.
Reentry centers: Facilities that help formerly incarcerated individuals transition back into society, offering support and supervision.
Electronic monitoring: Use of technology, such as ankle bracelets, to track individuals’ locations as part of correctional supervision.
Recurring service agreements: Contracts that provide for ongoing, repeated delivery of services over a set period.
Federal, state, and local government agencies: Different levels of government that may contract private companies for services like corrections or supervision.
TTM: The 12-month period ending with the most recent quarterly report.
Market capitalization: The total value of a company’s outstanding shares, calculated as share price times shares outstanding.
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Jonathan Ponciano has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
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