In recent days, you may have heard about the trades made by Paul Pelosi, the husband of Congressional Representative Nancy Pelosi. On two different dates, February 12 and February 21, Mr. Pelosi purchased call options on Palo Alto stock. The Congresswoman disclosed the trades on February 23, 2024.
Both trades were placed before Palo Alto's fourth-quarter earnings report, which was delivered on February 22, 2024. The first of those trades was placed after members of Congress were briefed on a "serious national threat."
PANW stock is up 12% since earnings.
Is it insider trading? That's a difficult claim to prove. But if you take politics out of it (which can be tricky), an evergreen truth comes from this activity.
Investors, even members of Congress, sell stocks for various reasons that have nothing to do with the fundamentals of a particular company. However, generally speaking, they only buy stocks for one reason. They anticipate the stocks will go up.
There are a few ETFs within the list of top Congressional Buying stocks. For the purposes of this presentation, we'll stick to individual stocks. Here are seven stocks that have seen the most buying from members of Congress in the last 90 days.
Quick Links
- Palo Alto Networks
- Chevron
- Barrick Gold
- Apple
- Merck & Co.
- Medtronic
- Lam Research
#1 - Palo Alto Networks (NASDAQ:PANW)
The aforementioned Palo Alto Networks Inc. (NASDAQ: PANW) heads the list of the Top Congressional Buying Stocks. At the time of this writing, four different members of Congress had purchased shares of PANW stock in five separate transactions. That list doesn't include at least two trades a congressman executed in the name of his spouse and child, respectively.
The recent surge in PANW stock has pushed its market cap above $100 billion, making it the largest cybersecurity company by market cap. The bullish price movement occurred after the company beat on the top and bottom lines when it reported earnings on February 22, 2024.
The stock was down sharply before the report, anticipating the company's announcement that it is undertaking an initiative to attract long-term customers. However, as part of the execution, the company plans to consolidate existing products and services into one platform. That will eat into margins.
Nevertheless, the need for cybersecurity will remain strong. And, if Congress is right, Palo Alto will get a significant share of that business.
About Palo Alto Networks
Palo Alto Networks, Inc provides cybersecurity solutions worldwide. The company offers firewall appliances and software; and Panorama, a security management solution for the global control of network security platform as a virtual or a physical appliance. It also provides subscription services covering the areas of threat prevention, malware and persistent threat, URL filtering, laptop and mobile device protection, DNS security, Internet of Things security, SaaS security API, and SaaS security inline, as well as threat intelligence, and data loss prevention.
Read More - Current Price
- $186.78
- Consensus Rating
- Moderate Buy
- Ratings Breakdown
- 32 Buy Ratings, 9 Hold Ratings, 2 Sell Ratings.
- Consensus Price Target
- $201.40 (7.8% Upside)
#2 - Chevron (NYSE:CVX)
Chevron Corporation (NYSE: CVX) was a target of interest from Congressional Republicans. Two senators executed three buys in the last ninety days.
Specifically, the purchase of CVX stock was done in December. The price of oil has been steadily climbing since that time. By itself, that doesn't mean much. This may just be a case of investors buying an undervalued asset.
Analysts, including many at MarketBeat, have been recommending oil and gas stocks for some time. In addition to geopolitical tensions, the possibility of interest rate cuts would likely stimulate demand, which already outpaces supply.
However, it's noteworthy that Congress has to take up the proposed merger between Chevron and Hess Corporation (NYSE: HESS). That merger may not be approved, but even if it's not approved, this seems like a case where both companies may come out stronger than they were before the merger. And Chevron is still a cash-rich company that has consistently prioritized shareholder value.
About Chevron
Chevron Corporation, through its subsidiaries, engages in the integrated energy and chemicals operations in the United States and internationally. The company operates in two segments, Upstream and Downstream. The Upstream segment is involved in the exploration, development, production, and transportation of crude oil and natural gas; processing, liquefaction, transportation, and regasification of liquefied natural gas; transportation of crude oil through pipelines; transportation, storage, and marketing of natural gas; and carbon capture and storage, as well as a gas-to-liquids plant.
Read More - Current Price
- $142.85
- Consensus Rating
- Moderate Buy
- Ratings Breakdown
- 14 Buy Ratings, 4 Hold Ratings, 0 Sell Ratings.
- Consensus Price Target
- $175.19 (22.6% Upside)
#3 - Barrick Gold (NYSE:GOLD)
As it turns out, at least one Republican senator may be a gold bug. On three separate occasions, the senator in question has bought shares of Barrick Gold Corp. (NYSE: GOLD). Interestingly, the purchases were made in December 2023. In January 2024, Barron's listed Barrick Gold among their top picks for 2024.
However, the case for the shiny metal in 2024 is murky. Those in the bullish camp would point to geopolitical uncertainty and out-of-control government spending, making the case for gold as a safe haven. Gold and precious metals also tend to be a hedge against a weaker dollar in a falling interest rate environment. On the other hand, the bears will point to the rate of inflation that continues to trend lower.
Nevertheless, analysts tend to believe that gold prices will be higher in late 2024 and into 2025 than they are today. Buying stock in a quality miner like Barrick Gold is a good pick-and-shovel way to play the sector.
About Barrick Gold
Barrick Gold Corporation is a sector-leading gold and copper producer. Its shares trade on the New York Stock Exchange under the symbol GOLD and on the Toronto Stock Exchange under the symbol ABX.
In January 2019 Barrick merged with Randgold Resources and in July that year it combined its gold mines in Nevada, USA, with those of Newmont Corporation in a joint venture, Nevada Gold Mines, which is majority-owned and operated by Barrick.
Read More - Current Price
- $15.46
- Consensus Rating
- Moderate Buy
- Ratings Breakdown
- 7 Buy Ratings, 5 Hold Ratings, 0 Sell Ratings.
- Consensus Price Target
- $24.82 (60.5% Upside)
#4 - Apple (NASDAQ:AAPL)
Apple Inc. (NASDAQ: AAPL) hasn't been getting much love in 2024. However, that didn't stop it from being one of the top stocks purchased by members of Congress. In the last 90 days, there have been three separate purchases by three different members.
It's not hard to make a bullish case for AAPL stock. Despite its recent downtrend, it remains one of the most widely held stocks, including by Warren Buffett. Many investors own Apple in one or more funds. And while Nvidia Corporation (NASDAQ: NVDA) may have overtaken it by market cap, Apple still moves markets.
The purchases were made before the company's recent earnings report and launch of Vision Pro. The device is getting mixed reviews, but Apple has historically been about the long game. It wasn't the first in many markets, but it has consistently figured out how to be the best.
That could very well be the case with artificial intelligence (AI). It's too early to tell, but for now, this seems like an understandable buy.
About Apple
Apple Inc designs, manufactures, and markets smartphones, personal computers, tablets, wearables, and accessories worldwide. The company offers iPhone, a line of smartphones; Mac, a line of personal computers; iPad, a line of multi-purpose tablets; and wearables, home, and accessories comprising AirPods, Apple TV, Apple Watch, Beats products, and HomePod.
Read More - Current Price
- $254.49
- Consensus Rating
- Moderate Buy
- Ratings Breakdown
- 24 Buy Ratings, 11 Hold Ratings, 2 Sell Ratings.
- Consensus Price Target
- $236.78 (7.0% Downside)
#5 - Merck & Co. (NYSE:MRK)
The biopharmaceutical industry is expected to make a strong recovery in 2024. That may be why there were three separate purchases of Merck & Co. Inc. (NYSE: MRK) stock by two members of Congress in December 2023 and January 2024.
MRK stock is up 20% in the last 12 months. However, the bulk of that gain has come since November 2023. Before that, the stock was being weighed down by concerns of an impending patent cliff for the company's blockbuster cancer drug, Keytruda.
However, the company's most recent earnings report showed that those concerns may be overblown, at least for now. Merck reported total Keytruda sales of $6.6 billion in just the fourth quarter of 2023.
Nevertheless, Keytruda accounted for about 45% of the company's overall revenue. That makes it essential that the company protect that revenue. It appears to be approaching that challenge from two directions. First, Merck is in clinical trials to get Keytruda approved for different indications. Second, the company has a deep pipeline of other drugs.
About Merck & Co., Inc.
Merck & Co, Inc operates as a healthcare company worldwide. It operates through two segments, Pharmaceutical and Animal Health. The Pharmaceutical segment offers human health pharmaceutical products in the areas of oncology, hospital acute care, immunology, neuroscience, virology, cardiovascular, and diabetes under the Keytruda, Bridion, Adempas, Lagevrio, Belsomra, Simponi, and Januvia brands, as well as vaccine products consisting of preventive pediatric, adolescent, and adult vaccines under the Gardasil/Gardasil 9, ProQuad, M-M-R II, Varivax, RotaTeq, Live Oral, Vaxneuvance, Pneumovax 23, and Vaqta names.
Read More - Current Price
- $98.05
- Consensus Rating
- Moderate Buy
- Ratings Breakdown
- 13 Buy Ratings, 7 Hold Ratings, 1 Sell Ratings.
- Consensus Price Target
- $127.13 (29.7% Upside)
#6 - Medtronic (NYSE:MDT)
Medtronic PLC (NYSE: MDT) is one of the world's leading medical device companies. Like many companies in this niche, MDT stock has failed to gain traction since 2020. However, that didn't stop two Congressional representatives from making a total of three purchases of the stock in January 2024.
Medtronic makes the bulk of its revenue in cardiovascular, neuroscience, and medical-surgical segments. All three segments will show strong growth in the next 10 years. That growth doesn't appear to be factored into MDT stock, which is up just 0.81% in the last 12 months, with much of that growth occurring since November 2023.
The Medtronic analyst ratings on MarketBeat give MDT stock a consensus Hold rating with a price target of $94.91, a 13.8% gain from its current price. The company is also one of the top dividend aristocrats, with a dividend yield of 3.31% as of February 29, 2024.
About Medtronic
Medtronic plc develops, manufactures, and sells device-based medical therapies to healthcare systems, physicians, clinicians, and patients worldwide. Its Cardiovascular Portfolio segment offers implantable cardiac pacemakers, cardioverter defibrillators, and cardiac resynchronization therapy devices; cardiac ablation products; insertable cardiac monitor systems; TYRX products; and remote monitoring and patient-centered software.
Read More - Current Price
- $81.03
- Consensus Rating
- Hold
- Ratings Breakdown
- 7 Buy Ratings, 9 Hold Ratings, 1 Sell Ratings.
- Consensus Price Target
- $95.00 (17.2% Upside)
#7 - Lam Research (NASDAQ:LRCX)
It may surprise you not to see Nvidia on this list. Then again, if you're looking for a different way to play the supercycle in the chip sector, Lam Research Corp. (NASDAQ: LRCX) is a good option. That may have been the thinking of the two representatives and one Senator who purchased LRCX in January 2023.
These seemed like well-timed buys, as LRCX stock is up 17% in 2024. The company makes the wafer fabrication equipment that chipmakers need.
At over $938 a share, the stock looks a little toppy. To that end, the Lam Research analyst ratings on MarketBeat give the stock a $793.27 price target, which is 15% lower than the price on February 29, 2024. However, they also maintain a Moderate Buy rating. This suggests that if you didn't get in on the stock like the members of Congress did, you may want to wait for a pullback.
This is one for the watchlist. But with demand for AI chips continuing to rise, Lam Research looks like it has a decent runway for growth.
About Lam Research
Lam Research Corporation designs, manufactures, markets, refurbishes, and services semiconductor processing equipment used in the fabrication of integrated circuits. The company offers ALTUS systems to deposit conformal films for tungsten metallization applications; SABRE electrochemical deposition products for copper interconnect transition that offers copper damascene manufacturing; SOLA ultraviolet thermal processing products for film treatments; and VECTOR plasma-enhanced CVD ALD products.
Read More - Current Price
- $71.79
- Consensus Rating
- Moderate Buy
- Ratings Breakdown
- 13 Buy Ratings, 7 Hold Ratings, 0 Sell Ratings.
- Consensus Price Target
- $97.24 (35.4% Upside)
The recent trade disclosed by Rep. Pelosi is not the first time, nor will it be the last time members of Congress have profited from a "well-timed" trade.
You can be outraged over what seems to be legalized insider trading among members of Congress. You also know that getting mad about it isn't going to change anything.
And I wouldn't hold my breath waiting for meaningful laws to be passed.
There is, however, an opportunity for you to use this trading to your advantage.
MarketBeat has a new tool that can help you easily find the stocks that U.S. Congress members are buying and selling. This is a free tool that you can find under the Financial Calendars tab on MarketBeat.com.
Like all of our stock screeners, you can filter your search by time frame, political party, and many stock-specific filters such as market cap and analyst consensus.
It's another tool that MarketBeat provides to give you access to information that keeps you informed. It's one data point, but as the saying goes, if you can't beat them, join them.
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