Congressional trading activity has been pushed into focus in recent years, spearheaded by the successful trades of Speaker Nancy Pelosi (and her husband). These trades are highly scrutinized and controversial because lawmakers making these trades may be involved with operations that could affect the companies purchased.
Quiver Quant offers a strategy, called the Congress Long-Short Strategy, that allows investors to follow the purchases and sales of members of Congress. The strategy has returned 24.11% over the past year, compared with the S&P 500’s 10% loss during the same period. Since its inception, the strategy has returned a compound annual growth rate of 58.85% with a max drawdown of 31.30%.
Meanwhile, the Securities and Exchange Commission (SEC) announced today that it had charged former Indiana Representative Stephen Buyer with insider trading. According to the complaint, Buyer is accused of trading with material, non-public information (MNPI) after he left office. The complaint alleges that Buyer was aware of T-Mobile’s (NASDAQ:TMUS) acquisition of Sprint before the information was publicly available. After receiving knowledge of the acquisition, Buyer purchased shares of Sprint and made a profit of more than $107,000. Buyer was also alleged to have participated in insider trading in relation with Navigant Consulting, which was bought out by Guidehouse.
With that in mind, let’s take a look at eight stocks that lawmakers have been buying.
8 Stocks Lawmakers Are Buying
Since July 15, members of the House have enacted 64 total trades. Most of these trades have been sales, although Oklahoma Rep. Kevin Hern has been responsible for several purchases.
On July 15, Hern purchased shares in several companies, such as Exxon Mobil (NYSE:XOM), Home Depot (NYSE:HD), Intel (NASDAQ:INTC), Lockheed Martin (NYSE:LMT), and Johnson & Johnson (NYSE:JNJ). The purchases for each of the five companies were between $1,001 and $15,000. The INTC and LMT purchases are especially interesting because both companies may see government related catalysts in the near term. Intel will directly benefit if the government approves $52 billion to subsidize domestic chip manufacturing and research. The Senate will vote on the outcome of the funding this week. Furthermore, there is speculation that Lockheed is nearing a $30 billion contract with the Pentagon.
Meanwhile, Florida Rep. Lois Frankel purchased between $1,001 and $15,000 of American Express (NYSE:AXP) on July 22. On the same day, New Jersey Rep. Josh Gottheimer purchased between $1,001 and $15,000 of UnitedHealth (NYSE:UNH) in two separate transactions. Three days later, California Rep. Alan Lowenthal purchased between $1,001 and $15,000 of S&P Global (NYSE:SPGI).
On the date of publication, Eddie Pan did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
