In this article, we will take a detailed look at American Politicians are Selling These 10 Stocks. For a quick overview of such stocks, read our article American Politicians are Selling These 5 Stocks.
Congressman Michael McCaul from Texas’s 10th congressional district is the Chairman of the House Foreign Affairs Committee. McCaul was one of the leading politicians calling for a ban on TikTok. He authored the bill against the Chinese social media company which the US Senate recently passed, calling TikTok a “spy balloon in Americans’ phones.” President Joe Biden has signed the bill into law that would ban TikTok if its owner ByteDance fails to divest the app within a year.
Congressman McCaul’s Purchase of Meta Platforms Gains Attention
But when Congressman McCaul was working against TikTok, he was also busy amassing Meta Platforms Inc (NASDAQ:META) shares, according to his public disclosures. On March 5, the Congressman bought Meta Platforms Inc (NASDAQ:META) shares worth between $100,000 to $250,000 at $490.22 per share. On March 1, he had bought somewhere between 200-498 Meta Platforms Inc (NASDAQ:META) shares, at $502.3 per share. Analysts believe a ban on TikTok would be a tailwind for US social media companies like Meta Platforms and Snapchat. Because of such overlaps, calls for a total ban on stock trading for politicians have been growing louder. But we aren’t interested in any such bans, since as retail investors any publicly available data showing what insiders are buying is an opportunity. Why? Insider Monkey’s monthly newsletter and portfolio that focuses on activist hedge funds, insider trading and stock picks from hedge fund investor newsletters and conferences returned 199.2% between March 2017 and March 12, 2024 and outperformed the S&P 500 ETFs’ 144.9% gain by more than 54 percentage points.
Stock trades from politicians in the US have always sparked controversies and made headlines over the past few years. In 2022, a Wall Street Journal investigation showed that thousands of officials working across 50 federal agencies were involved in buying or selling of stocks of companies that were directly affected by the decisions of their agencies. The Journal analyzed about 31,000 disclosures of 12,000 officials made during 2016 through 2021.
Do Politicians Beat the Market?
However, the most important question in any discussion surrounding American politicians trading stocks is this: do politicians’ stock picks really beat the market? A detailed research by Unusual Whales found that in 2022, out of the 100 Congress members who traded stocks, 33% beat SPY with their portfolios. Another interesting insight highlighted in the report said that Democrats beat Republicans by significant margins. However, there were some anomalies. For example, former House Speaker Nany Pelosi’s portfolio, which is often a topic of discussion and is keenly watched by investors, fell about 19.8% in 2022, more than the 18% decline for the SPY.
Politicians’ stock picking skills received massive attention during the pandemic days. For example, Senator Rand Paul’s wife bought shares in Gilead Sciences just before the WHO declared COVID-19 a pandemic. So what? Analysts were quick to highlight that Paul was part of a Senate health committee that received special briefings from the then government about the pandemic situation in January 2020.
There have been several research reports highlighting instances where politicians used their influence to allegedly profit from different deals. For example a research paper titled “Trading” Political Favors: Evidence from the Impact of the STOCK Act” talked about an interesting case from 2009:
“Politicians can favor certain groups of firms or individual firms in decisions that have significant economic impact on firm performance, such as the passage of legislations and regulations, the awarding of government contracts, and the selection into government programs. An example can be found in Congressman Tom Petri’s dealings with the Oshkosh Corporation, a manufacturer of specialty trucks and military vehicles. 2 In 2009, Representative Petri helped Oshkosh secure a $3 billion contract from the U.S. Army, after the award was challenged by a competitor and then under review by the Government Accountability Office, by sending letters and memos to colleagues and officials on the Hill and at the Pentagon including the Defense Secretary, the Chairman of the House Armed Services Committee, and the Secretary of the Army. Meanwhile, Petri owned a substantial amount of Oshkosh stock, valued at between $250,000 and $500,000, and purchased additional shares as he was making contacts on behalf of the company to resolve the dispute. Oshkosh’s stock price rose from $8 per share in early 2009 to $38 per share in February 2010, when its contract with the Army was finalized.”
Methodology
For this article we scanned publicly available data and filings of American politicians and picked 10 stocks Congress members and senators were selling over the past few months. Some top names in the list include NVIDIA Corp (NASDAQ:NVDA), Apple Inc (NASDAQ:AAPL) and Tesla Inc (NASDAQ:TSLA).
10. BRP Group Inc (NASDAQ:BRP)
Number of Hedge Fund Investors: 15
Congressman Scott Franklin from the Republican Party on March 21 sold a stake worth between $1 million to $5 million in insurance company BRP Group Inc (NASDAQ:BRP). Since then through April 24 BRP Group Inc’s (NASDAQ:BRP) shares have lost about 8% in value.
In addition to BRP, NVIDIA Corp (NASDAQ:NVDA), Apple Inc (NASDAQ:AAPL) and Tesla Inc (NASDAQ:TSLA) are also seeing insider selling.
9. Synovus Financial Corp (NYSE:SNV)
Number of Hedge Fund Investors: 25
Greg Steube, the Republican Congressman from Florida’s 17th congressional district, on March 28 sold shares in Synovus Financial Corp (NYSE:SNV) worth between $15,000 to $50,000 at $40.06 per share. Since then the stock is down 8%.
8. Insulet Corp (NASDAQ:PODD)
Number of Hedge Fund Investors: 50
Senator Tina Smith dumped insulin delivery systems company Insulet Corp (NASDAQ:PODD) shares on April 4 at $163.25. The total worth of these shares was between $50,000 to $100,000. Since then the stock is up 2.45%. Senator Markwayne Mullin also sold a stake in Insulet Corp (NASDAQ:PODD) back in December 2023.
Carillon Scout Mid Cap Fund made the following comment about Insulet Corporation (NASDAQ:PODD) in its Q3 2023 investor letter:
“Insulet Corporation (NASDAQ:PODD), the diabetes management device company, was the second largest detractor to portfolio performance. The company was hit by negative sentiment regarding GLP-1 agonists and their potential to reduce the number of type 2 diabetics on insulin therapy. Type 1 diabetes has become increasingly prevalent, which could offset the lower outlook for cases of type 2 diabetes, but the market ignored this development.”
7. NextEra Energy Inc (NYSE:NEE)
Number of Hedge Fund Investors: 65
NextEra Energy Inc (NYSE:NEE) ranks seventh in our list of the stocks sold by American politicians in 2024. Senator Tina Smith sold a stake worth between $100,000 to $250,000 in NextEra Energy Inc (NYSE:NEE) on April 4. Since then the stock has gained about 4.43%. Congressman Rick Allen also sold NextEra Energy Inc (NYSE:NEE) shares worth between $15,000 to $50,000 back in December 2023.
ClearBridge Value Equity Strategy stated the following regarding NextEra Energy, Inc. (NYSE:NEE) in its fourth quarter 2023 investor letter:
“We added a new position in NextEra Energy, Inc. (NYSE:NEE), in the utilities sector, which acquires, owns and manages contracted clean energy projects in the U.S. The company was at the center of the defensive stock storm when it slowed its renewable growth outlook modestly in late September, and the stock collapsed almost 30% in less than two weeks. We saw this as an opportunity to invest in arguably the best combination of a regulated utility and an experienced renewable operator with good long-term growth options. Even at a much-reduced estimated growth rate from higher financing costs, which will likely prove to be conservative, our estimate of intrinsic business value is materially higher.”
Like NVIDIA Corp (NASDAQ:NVDA), Apple Inc (NASDAQ:AAPL) and Tesla Inc (NASDAQ:TSLA), NEE is also seeing selling from Washington insiders.
6. Boeing Co (NYSE:BA)
Number of Hedge Fund Investors: 69
Boeing Co (NYSE:BA) continues to suffer amid safety concerns around its planes. The stock is down 34% this year through April 25. Congressman Bill Keating from the Democratic Party on February 8 dumped a stake worth between $15,000 to $50,000 in Boein. He had also sold Boeing Co (NYSE:BA) shares worth between $1K to $15K on February 28 at $207 per share. Since February 8 through April 24 Boeing Co (NYSE:BA) shares are down 21%.
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Disclosure. None. American Politicians are Selling These 10 Stocks was initially published on Insider Monkey.