Sometimes, the best trading advice can come from a list of stocks owned by Congress. If they are buying, you may want to look into it. Politicians seem to have an uncanny, remarkable track record of success.
For example, on Nov. 22, Rep. Nancy Pelosi bought 50 Nvidia (NASDAQ:NVDA) 20 Dec 2024 $120 call options even as the underlying stock traded at a high of $503.31. Today, NVDA stock trades around $784. Had you followed her into NVDA, you stood to make a good deal of money.
Granted, not all of her trades worked out so well, but the exception proves the rule. So if you find that a top official is buying something, you may want to do your due diligence and consider following them in. The only downfall to this strategy is that elected officials don’t have to disclose their transactions for 30 to 45 days under the STOCK Act. These three companies are some of the most popular stocks owned by Congress.
Simon Property Group (SPG)
One of the top stocks owned by Congress is Simon Property Group (NYSE:SPG), a real estate investment trust (REIT) that yields 5.2%.
On Feb. 2, Rep. Victoria Spartz bought 91,000 shares for around $138 — just as it was bottoming out around the time earnings were coming out. The trade was then disclosed on Feb. 16, as SPG traded at $146. A week later it was up to $151. So, even if you and I bought on the disclosure, we would still have walked away with a few dollars.
At the time, it was a good bet on potential interest rate cuts and the company’s announcement of a $2 billion stock buyback. However, with no interest rate cuts to be seen, and the buyback news priced in, I’d wait for SPG stock to put in a healthy pullback before even considering buying Simon Property Group here.
With earnings, the REIT is seeing improvements. In its fourth quarter, Simon saw funds from operations (FFO) of $3.69, which beat by 36 cents. Revenue of $1.53 billion was up about 9% year over year, and beat estimates by $160 million. Guidance was a bit underwhelming, though. For the full-year 2024, it now expects its FFO to come in between $11.85 and $12.10 per share, which is lower than expectations for a range of $12.20 to $12.51 per share.
Apollo Medical Holdings (AMEH)
We learned that Rep. Judy Chu bought just over $350,000 worth of Apollo Medical (NASDAQ:AMEH), as noted by CapitolTrades.com. The stock was purchased on Jan. 10 at $37.66. When the transaction was disclosed on Jan. 22, it traded at $37.65. Today, it closed at $42.79. If you bought on the disclosure, you could have made a nice little profit.
At its current price though, I’d wait for it to pull back. Right now, it’s overbought on various technical analysis indicators like relative strength, moving averages, and momentum. However, over the long term, it could be attractive. According to Bank of America – which upgraded it to a buy rating – there’s “an inflection point in the growth story, with a high confidence path to sustaining 30-40%+ revenue and 20%+ EBITDA growth through at least 2026,” as quoted by Seeking Alpha.
The firm also points to a few key headwinds for AMEH, including organic contract wins, tuck-in mergers and acquisitions and a reduction in its corporate tax rate. Of special note is the end of Medicaid redeterminations, which is Apollo Medical’s largest customer segment.
Vanguard Growth ETF (VUG)
Another top trade was the Vanguard Growth ETF (NYSEARCA:VUG). We can see that on Nov. 3, Rep. Hal Rogers bought shares just under $270. That was then disclosed on Dec. 20. Then, on Jan. 19, Rep. Blake Moore bought shares at $319.98. He then disclosed that five days later on Jan. 24. Since then, the VUG ETF ran to $338.84.
While it’s also a bit overbought at the moment, it could eventually see higher highs. Vanguard Growth has an expense ratio of just 0.04%. Like all of Vanguard’s family of funds, they tend to be the lowest in the business. The Vanguard Growth ETF tracks the nation’s largest growth stocks, including Microsoft (NASDAQ:MSFT), Apple (NASDAQ:AAPL), Nvidia and Amazon (NASDAQ:AMZN) to name a few of its 208 holdings.
These, of course, were some of the leading Magnificent Seven stocks last year and powered the market indexes to new highs. As some of these companies are roaring ahead out of the gate again in 2024, Vanguard Growth should prosper too, no matter which congressional representative is buying the stock.
On the date of publication, Ian Cooper did not hold (either directly or indirectly) any positions in the securities mentioned. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
