This Metric Says You Are Smart to Buy The Geo Group, Inc. (NYSE:GEO)

The Geo Group, Inc. (NYSE:GEO) shareholders have witnessed an increase in enthusiasm from smart money in recent months.

At the moment, there are dozens of indicators investors can use to monitor Mr. Market. Some of the best are hedge fund and insider trading sentiment. At Insider Monkey, our studies have shown that, historically, those who follow the top picks of the best hedge fund managers can outpace the S&P 500 by a solid margin (see just how much).

Equally as beneficial, bullish insider trading sentiment is another way to parse down the investments you’re interested in. As the old adage goes: there are lots of stimuli for a corporate insider to get rid of shares of his or her company, but only one, very simple reason why they would behave bullishly. Various academic studies have demonstrated the market-beating potential of this method if shareholders know what to do (learn more here).

Now, it’s important to take a gander at the latest action encompassing The Geo Group, Inc. (NYSE:GEO).

How are hedge funds trading The Geo Group, Inc. (NYSE:GEO)?

At year’s end, a total of 21 of the hedge funds we track were long in this stock, a change of 11% from one quarter earlier. With hedgies’ positions undergoing their usual ebb and flow, there exists a few noteworthy hedge fund managers who were increasing their holdings substantially.

When looking at the hedgies we track, Matt Sirovich and Jeremy Mindich’s Scopia Capital had the biggest position in The Geo Group, Inc. (NYSE:GEO), worth close to $300 million, accounting for 12.1% of its total 13F portfolio. On Scopia Capital’s heels is Thomas Lenox Kempner of Davidson Kempner, with a $23 million position; 2.7% of its 13F portfolio is allocated to the company. Some other peers that hold long positions include Steven Cohen’s SAC Capital Advisors, D. E. Shaw’s D E Shaw and Timothy S. Peterson’s Regiment Capital.

As aggregate interest increased, key hedge funds have been driving this bullishness. Regiment Capital, managed by Timothy S. Peterson, created the most outsized call position in The Geo Group, Inc. (NYSE:GEO). Regiment Capital had 15 million invested in the company at the end of the quarter. Andrew Weiss’s Weiss Asset Management also made a $10 million investment in the stock during the quarter. The other funds with new positions in the stock are Israel Englander’s Millennium Management, Curtis Schenker and Craig Effron’s Scoggin, and Louis Bacon’s Moore Global Investments.

What do corporate executives and insiders think about The Geo Group, Inc. (NYSE:GEO)?

Insider trading activity, especially when it’s bullish, is best served when the company we’re looking at has seen transactions within the past 180 days. Over the last six-month time period, The Geo Group, Inc. (NYSE:GEO) has seen zero unique insiders purchasing, and 11 insider sales (see the details of insider trades here).

With the returns exhibited by our research, retail investors should always monitor hedge fund and insider trading activity, and The Geo Group, Inc. (NYSE:GEO) applies perfectly to this mantra.

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