River Road Asset Management, an investment management company released its “River Road Small Cap Value Fund” Q4 2024 investor letter. A copy of the letter can be downloaded here. In the fourth quarter, AMG River Road Small Cap Value Fund (Class N) returned 7.35% compared to -1.06% returns for the Russell 2000® Value Index. For the year 2024, the fund returned 14.07%, significantly outperforming Index return of 8.06%. Stocks rallied in November after a Republican victory but declined sharply following hawkish Fed comments. Shorter duration stocks, including small caps and value, lost most of their post-election gains by the end of December. Small caps lagged their large counter parts for eight consecutive years. For more information on the fund’s best picks in 2024, please check its top five holdings.
In its fourth quarter 2024 investor letter, River Road Small Cap Value Fund emphasized stocks such as The GEO Group, Inc. (NYSE:GEO). The GEO Group, Inc. (NYSE:GEO) owns and manages secure facilities, processing centers, and community-based reentry facilities. The one-month return of The GEO Group, Inc. (NYSE:GEO) was 9.66%, and its shares gained 101.72% of their value over the last 52 weeks. On March 28, 2025, The GEO Group, Inc. (NYSE:GEO) stock closed at $29.31 per share with a market capitalization of $4.096 billion.
River Road Small Cap Value Fund stated the following regarding The GEO Group, Inc. (NYSE:GEO) in its Q4 2024 investor letter:
“The holding with the highest contribution to active return in the portfolio during Q4 was The GEO Group, Inc. (NYSE:GEO), an owner and operator of private prisons for federal, state, local, and foreign governments. GEO rallied significantly after the U.S. election victory of President Trump and the Republican majority in the House and Senate. GEO is poised to play a large role in President Trump’s top agenda item of mass deportation of undocumented immigrants. Given the estimates of roughly 11 million to 13 million undocumented immigrants crossing the border during the Biden administration, the resources required for deportation will be enormous. The demand for detention beds should greatly exceed the available supply for several years. We expect GEO’s largest customer, Immigration and Customs Enforcement (ICE), will take all available GEO detention beds for the foreseeable future. Additionally, GEO’s electronic monitoring segment has held the exclusive contract for ICE’s Alternatives to Detention program for 15 years. This is GEO’s highest margin segment, and we expect a substantial increase in electronic monitoring usage. We trimmed the position.”
Security guards in uniforms patrolling an area, standing for the company’s safe and secure facilities.
The GEO Group, Inc. (NYSE:GEO) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 39 hedge fund portfolios held The GEO Group, Inc. (NYSE:GEO) at the end of the fourth quarter compared to 28 in the third 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 cheapest AI stock.
We covered The GEO Group, Inc. (NYSE:GEO) in another article, where we discussed the factors responsible for the remarkable rise in several small-cap stocks. In addition, please check out our hedge fund investor letters Q4 2024 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.