In this article, we discuss 10 stocks US politicians bought before Russia’s attack on Ukraine.
In an attempt to make personal investments by members of Congress, their staff, and public officials more transparent, a bill was passed in 2012 which banned using insider information for personal gains in trading. Similarly, US politicians are required to disclose their personal trades within 45 days of the transactions.
“We’re a free market economy”
There are mixed views about politicians trading individual stocks. In December 2021, Nancy Pelosi, speaker of the United States House of Representatives, argued that it is a free economy and politicians along with their families should be treated as normal investors who participate in the stock market. However, a vast majority disagrees with her, believing that public officials benefit from insider information to profit from market irregularities. For example, many members of the Congress disposed of their stocks before the markets crashed in 2020 as the COVID-19 pandemic started gaining media attention.
It was reported on February 9 that after receiving backlash for her comments, House speaker Nancy Pelosi has given up her battle and is helping to craft a legislation that bans Congress members from trading. This legislation will be put up for voting later. The US Senate is also formulating a similar legislation, which is co-authored by senators Elizabeth Warren and Steve Daines.
Before Russia invaded Ukraine on February 24, many politicians loaded up on stocks that have gained significantly in the last month. Some of the most notable purchases by US Congress members included Lockheed Martin Corporation (NYSE:LMT), Chevron Corporation (NYSE:CVX), and Block, Inc. (NYSE:SQ), among others discussed at length below.
Photo by Joel Rivera-Camacho on Unsplash
Our Methodology
The companies listed below were picked from the Periodic Transaction Report(s) that US politicians are obliged to file. It is important to clarify that the companies listed below were picked from the public record of investments that US politicians and their families have made from February 1 to February 24. The purchases may not have been made by the politicians themselves but only disclosed on behalf of their family.
Data from 900+ elite hedge funds tracked by Insider Monkey in Q4 2021 was used to identify the number of hedge funds that hold stakes in each firm.
Stocks US Politicians Bought Before Russia’s Attack on Ukraine
10. ONEOK, Inc. (NYSE:OKE)
Number of Hedge Fund Holders: 25
ONEOK, Inc. (NYSE:OKE) was founded in 1906 and is headquartered in Tulsa, Oklahoma. The company is engaged in processing, storing, and transporting natural gas in the United States. Amid the energy crisis caused by the Russian attack on Ukraine, the stock has gained close to 14% over the last month.
Kevin Hern, a Republican from Oklahoma’s 1st congressional district who is a member of the United States House of Representatives, purchased shares of ONEOK, Inc. (NYSE:OKE) on February 14. The transaction was disclosed the next day. He bought a position in the company worth between $1,001 and $15,000.
ONEOK, Inc. (NYSE:OKE) delivers a dividend yield of 5.45% as of March 21. ONEOK, Inc. (NYSE:OKE) declared a $0.935 per share quarterly dividend on January 19, which was paid to shareholders on February 14.
Truist analyst Tristan Richardson raised the price target on ONEOK, Inc. (NYSE:OKE) to $78 from $72 and kept a Buy rating on the shares on March 3. He stated that ONEOK, Inc. (NYSE:OKE) shares should continue to find positive support as the Bakken oil field offers sufficient leverage in the current environment, and there is potential for outsized earnings growth relative to broader midstream.
According to the fourth quarter database of Insider Monkey, 25 hedge funds were bullish on ONEOK, Inc. (NYSE:OKE), up from 18 funds in the prior quarter. Phill Gross and Robert Atchinson’s Adage Capital Management is the leading shareholder of ONEOK, Inc. (NYSE:OKE), with 475,200 shares worth approximately $28 million.
In addition to Lockheed Martin Corporation (NYSE:LMT), Chevron Corporation (NYSE:CVX), and Block, Inc. (NYSE:SQ), institutional investors are loading up on ONEOK, Inc. (NYSE:OKE).
Here is what Miller Howard Investments has to say about ONEOK, Inc. (NYSE:OKE) in its Q3 2021 investor letter:
“In late August, we increased the portfolio’s cyclical exposure by trimming utilities after a period of relative outperformance and reallocating the capital to midstream energy, which had pulled back over the summer. We added ONEOK Inc. (OKE) with the expectation that it will benefit from increasing natural gas and natural gas liquids (NGL) recovery in the Bakken region.”
9. Energy Transfer LP (NYSE:ET)
Number of Hedge Fund Holders: 36
Energy Transfer LP (NYSE:ET) is a company that operates a natural gas transportation pipeline and natural gas storage facilities. The company also supplies natural gas to electric utilities, independent power plants, and industrial end-users. Energy Transfer LP (NYSE:ET) is based in Dallas, Texas.
Mark Green is a United States representative for Tennessee’s 7th congressional district, and he is one of the most active traders in Congress. He disclosed on February 11 a transaction for common stock of Energy Transfer LP (NYSE:ET) worth between $500,001 to $1,000,000. The purchase took place on February 9.
On February 16, Energy Transfer LP (NYSE:ET) rose 3.6% after the Q4 revenue topped expectations and the adjusted EBITDA of $2.81 billion came in above the $2.76 billion analyst consensus estimate. Management reported that the improved results were primarily driven by higher natural gas liquids transportation and export volumes, as well as an increase in commodity prices.
Mizuho analyst Gabriel Moreen on February 18 raised the price target on Energy Transfer LP (NYSE:ET) to $14 from $13 and kept a Buy rating on the shares. According to the analyst, positive commercial updates by Energy Transfer LP (NYSE:ET) that reflect growth potential in the current market are more notable than the company’s “strong” 2022 EBITDA guidance.
A total of 36 hedge funds were long Energy Transfer LP (NYSE:ET) in Q4 2021, up from 29 funds in the earlier quarter. Abrams Capital Management owned the leading stake in the company, with more than 22 million shares worth $182 million.
Miller Value Partners, an investment firm, talked about Energy Transfer L.P. (NYSE:ET) in its Q2 2021 investor letter. Here is what the fund said:
“Energy Transfer LP (ET) rose over the period along with the price of oil climbing 40.59% over the period. The company received positive news that the Dakota Access Pipeline project would not be shut down while the Environmental Impact Statement by the US Army Corps of Engineers is drawn up. Energy Transfer reported strong 1Q results with revenue of $17B surpassing expectations for $11.8B with adjusted earnings before income, taxes, depreciation and amortization (EBITDA) hitting $5.04B ahead of consensus of $2.77B. The company raised full year adjusted EBITDA guidance to $12.9-13.3B from $10.6-11.0B previously, with the increase largely related to the benefits realized from Winter Storm Uri. The company paid down $3.7B in debt during the quarter, using strong cash flow to reduce leverage. The company also announced the issuance of $900M in 6.5% Series H perpetual preferreds with the company using the proceeds to repay debt and for general purposes.”
8. Duke Energy Corporation (NYSE:DUK)
Number of Hedge Fund Holders: 36
Duke Energy Corporation (NYSE:DUK) was founded in 1904 and is headquartered in Charlotte, North Carolina. The company uses coal, hydroelectric, natural gas, oil, renewable sources, and nuclear fuel to generate electricity. Duke Energy Corporation (NYSE:DUK) operates via three segments: Electric Utilities and Infrastructure, Gas Utilities and Infrastructure, and Commercial Renewables. Amid the macro war backdrop, the stock has gained 6.75% in the last month.
Virginia Foxx, the Republican U.S. representative for North Carolina’s 5th congressional district, purchased on February 11 shares of Duke Energy Corporation (NYSE:DUK) worth between $15,001 and $50,000, as per the Period Transaction Report published on her behalf.
On March 21, Duke Energy Corporation (NYSE:DUK) along with its subsidiaries entered into an amended credit agreement that raised the amount of the credit facility available to the company from $8 billion to $9 billion, extending the termination date to March 2027 from March 2025.
Duke Energy Corporation (NYSE:DUK) announced its clean energy goals on February 9, stating that coal will represent less than 5% of total energy generation by 2030, and the company aims to fully exit coal as a power resource by 2035. The net-zero goals for 2050 include the reduction of Scope 2 and Scope 3 emissions across its value chain.
BofA analyst Julien Dumoulin-Smith upgraded Duke Energy Corporation (NYSE:DUK) on February 14 to Buy from Neutral with a $110 price target after its Q4 results. According to the analyst, Duke Energy Corporation (NYSE:DUK) is positioned to “over-deliver” on a few aspects of its 2022 plan, and management has set highly achievable expectations. In what will be a transformative year for Duke Energy Corporation (NYSE:DUK), the analyst sees the current valuation as an attractive entry point for the stock.
Among the hedge funds tracked by Insider Monkey, 36 funds were bullish on Duke Energy Corporation (NYSE:DUK), up from 32 funds in the prior quarter. Renaissance Technologies is the largest shareholder of the company, with 1.74 million shares worth $183.2 million.
7. FirstEnergy Corp. (NYSE:FE)
Number of Hedge Fund Holders: 40
FirstEnergy Corp. (NYSE:FE) has gained almost 6.50% in the last month as the Russian attack on Ukraine sent energy stocks soaring. FirstEnergy Corp. (NYSE:FE) is an Ohio-based electricity provider, using coal-fired, nuclear, hydroelectric, natural gas, wind, and solar power generating facilities.
Earl Blumenauer is an American Democrat who serves as the U.S. representative for Oregon’s 3rd congressional district. The politician bought FirstEnergy Corp. (NYSE:FE) shares on February 11, valued somewhere between $1,001 and $15,000. The purchase was disclosed on March 7.
On January 7, Evercore ISI analyst Michael Lonegan upgraded FirstEnergy Corp. (NYSE:FE) to Outperform from In Line with a price target of $46, up from $40. The analyst believes FirstEnergy Corp. (NYSE:FE) shares offer investors an “inexpensive opportunity” that has not yet completely realized the advantages of shifting to a fully regulated electric utility.
According to the fourth quarter database of Insider Monkey, 40 hedge funds held long positions in FirstEnergy Corp. (NYSE:FE), compared to 38 funds in the prior quarter. The total stakes held in Q4 by elite funds amounted to $1.75 billion. Carl Icahn’s Icahn Capital LP is the biggest shareholder of the company, owning approximately 19 million shares worth $788.8 million.
FirstEnergy Corp. (NYSE:FE) was on the radar of US politicians prior to the Ukraine war, in addition to Lockheed Martin Corporation (NYSE:LMT), Chevron Corporation (NYSE:CVX), and Block, Inc. (NYSE:SQ).
6. Lockheed Martin Corporation (NYSE:LMT)
Number of Hedge Fund Holders: 42
Lockheed Martin Corporation (NYSE:LMT) stock has climbed almost 14% in the last month amid the Russian invasion of Ukraine, given investors flock to defense stocks in a war situation. Lockheed Martin Corporation (NYSE:LMT) is an aerospace and defense technology company that operates via four main segments: Aeronautics, Missiles and Fire Control, Rotary and Mission Systems, and Space.
Marjorie Greene, a Republican who has served as the U.S. representative for Georgia’s 14th congressional district since 2021, purchased shares of Lockheed Martin Corporation (NYSE:LMT) on February 22, valued at between $1,001 and $15,000. The transaction was disclosed via a Periodic Transaction Report on February 24.
On March 21, the Missiles and Fire Control segment of Lockheed Martin Corporation (NYSE:LMT) was awarded a $318.93 million fixed-price contract modification to the previous contract put forward by the US Air Force Life Cycle Management Center, and the work is expected to conclude by January 31, 2026. The total cumulative face value of the contract is $988.55 million.
Wells Fargo analyst Matthew Akers raised the price target on Lockheed Martin Corporation (NYSE:LMT) to $486 from $400 on March 7 and kept an Equal Weight rating on the shares. The analyst believes valuation is likely to remain elevated given the geopolitical tensions for some time to come.
D E Shaw is a prominent Lockheed Martin Corporation (NYSE:LMT) shareholder, with a position worth $171.3 million. Overall, 42 hedge funds were bullish on the stock at the end of December 2021.
Here is what Vltava Fund has to say about Lockheed Martin Corporation (NYSE:LMT) in its Q4 2021 investor letter:
“Of course, not all of our companies are doing better than we expected. Lockheed Martin fell somewhat short of our expectations last year. In the cases of Lockheed disruptions in the supply and logistics chains. Lockheed uses a great many subcontractors from various countries and could not avoid issues with continuity of supplies. As a result, production will be slightly lower than we had expected.”
5. Chevron Corporation (NYSE:CVX)
Number of Hedge Fund Holders: 53
Chevron Corporation (NYSE:CVX) has perhaps been one of the top gainers in the energy sector since Russia invaded Ukraine on February 24, with the stock climbing 24.35% over the last month. Chevron Corporation (NYSE:CVX) operates as a multinational oil and gas company that was founded in 1879 and is based in San Ramon, California.
A Periodic Transaction Report dated February 17 reveals that John Rutherford, a member of the United States House of Representatives from Florida’s 4th congressional district, purchased a stake in Chevron Corporation (NYSE:CVX) worth between $1,001 to $15,000.
On January 26, Chevron Corporation (NYSE:CVX) declared a $1.42 per share quarterly dividend, a 6% increase from its prior dividend of $1.34. The dividend was distributed on March 10, and the stock yields 3.45% as of March 21.
Morgan Stanley analyst Devin McDermott on March 14 downgraded Chevron Corporation (NYSE:CVX) to Equal Weight from Overweight with an unchanged price target of $166. He stated that while Chevron Corporation (NYSE:CVX) shares have gained 46% year-to-date, and roughly 25% in the past month, the valuation is “beginning to look expensive”. He cited that Exxon Mobil Corporation (NYSE:XOM), the closest Chevron peer, has much better prospects.
According to the fourth quarter database of Insider Monkey, 53 hedge funds were bullish on Chevron Corporation (NYSE:CVX), and Berkshire Hathaway is the biggest shareholder of the company. Warren Buffett’s fund owns 38.2 million Chevron Corporation (NYSE:CVX) shares, worth $4.4 billion.
Here is what Goehring & Rozencwajg Associates has to say about Chevron Corporation (NYSE:CVX) in its Q3 2021 investor letter:
“After successfully replacing 25% of Exxon’s board of directors despite owning just 0.02% of the outstanding equity, Engine No. 1, the climate-focused activist hedge fund, met with Chevron’s management late last summer. In discussions that were later described as “cordial,” Chevron executives shared their plan to reduce carbon emissions. Subsequently, Chevron announced new plans to further reduce carbon output, along with their intention to appoint a new director with “environmental expertise.” Although it remains unclear exactly what Engine No. 1 is planning, rumors suggest the fund has contacted other investors, strongly suggesting they intend to launch a second campaign in the not-too-distant future.
What should Chevron expect?
It was recently reported by The Wall Street Journal that Exxon was considering abandoning two massive natural gas projects: the 75 trillion cubic foot (tcf ) Rovuma LNG project (capital cost $30 bn) and the 5 tcf Ca Voi Xanh offshore-Vietnam gas project (capital cost $10 bn). Exxon board members (most likely including the three supported by Engine No. 1) have publicly expressed concerns about both projects. According to internal reports, these projects are among the highest CO2 producers in Exxon’s pipeline; it is no surprise these projects have been called into question. However, we find the plight of both fields to be perplexing since production would almost certainly be used to displace coal in electricity generation, cutting CO2 emissions by nearly 50%. This fact seems to be lost on the new Exxon board members.”
4. McKesson Corporation (NYSE:MCK)
Number of Hedge Fund Holders: 57
McKesson Corporation (NYSE:MCK) is a Texas-based healthcare company involved in the distribution of pharmaceutical drugs, health information technology, and medical equipment. The stock has jumped over the last month, gaining 11.50%.
McKesson Corporation (NYSE:MCK) shares were purchased on February 7 by Lois Frankel, a Democrat who is the United States Representative for Florida’s 21st congressional district. The Period Transaction Report disclosed that Frankel purchased McKesson Corporation (NYSE:MCK) shares valued at between $1,001 and $15,000, with the transaction being publicly declared on February 26.
Publishing its Q4 results on February 2, McKesson Corporation (NYSE:MCK) reported earnings per share of $6.15, above consensus by $0.73. Revenue over the period jumped 9.61% year-over-year to $68.61 billion, outperforming market predictions approximately $2 billion.
On February 8, UBS analyst Kevin Caliendo raised the price target on McKesson Corporation (NYSE:MCK) to $303 from $245 and kept a Buy rating on the shares after its Q4 earnings beat. According to the analyst, a diverse business model, combined with strong cash flow and the company’s edge in oncology and biosimilars positions it for competitive advantage.
A total of 57 hedge funds were long McKesson Corporation (NYSE:MCK) in Q4 2021, up from 51 funds in the prior quarter. Pzena Investment Management is the largest shareholder of the company, owning 2.95 million shares of the company, worth $733.45 million.
Here is what Broyhill Asset Management has to say about McKesson Corporation (NYSE:MCK) in its Q4 2021 investor letter:
“Shares of McKesson tacked on another 23% during the second half. Even after gaining 44% for the full year, the stock still trades at a 50% discount to the market. Like our Dollar Tree investment, investor sentiment around McKesson languished for years as deflating generic drug prices compressed operating margins and the uncertainty of opioid litigation capped valuation multiples. But pricing has stabilized, a global opioid settlement appears imminent, and prescription trends are rapidly recovering at the same time vaccine-related revenues are accelerating.
Since FY19, revenues have grown at 7% annually, driving earnings per share growth, which should shake out at 11% – 14% through FY22. Over this three-year period, McKesson has generated $15 billion in cumulative free cash flow (roughly two-thirds of its market capitalization at the beginning of the period), returning roughly half of that to shareholders through repurchases (shares outstanding have declined by 24% on $6B of buybacks) and dividends (which have increased 22% over this period), while reducing leverage from 2.8x to 1.6x.
Does that sound like a business that should change hands at half the market’s valuation? We don’t think so. Even assuming shares traded back to three-quarters of the market’s multiple (in line with the average of the past decade), shares could return 15% – 20% annually over the next few years.”
3. Broadcom Inc. (NASDAQ:AVGO)
Number of Hedge Fund Holders: 62
Broadcom Inc. (NASDAQ:AVGO) is a California-based supplier of semiconductors and relevant infrastructure to global markets. Ro Khanna, the U.S. representative from California’s 17th congressional district, purchased shares of Broadcom Inc. (NASDAQ:AVGO) on February 1. The transaction, disclosed on March 3, was worth between $1,001 and $15,000.
Broadcom Inc. (NASDAQ:AVGO) reported Q4 results on March 3, posting an EPS of $8.39, topping market estimates by $0.24. The fourth quarter revenue jumped 15.79% year-over-year to $7.71 billion, above consensus by $99.60 million.
On March 3, Broadcom Inc. (NASDAQ:AVGO) declared a $4.10 per share quarterly dividend. It is payable on March 31, to shareholders of record on March 22.
Truist analyst William Stein raised the price target on Broadcom Inc. (NASDAQ:AVGO) to $686 from $659 and kept a Buy rating on the shares on March 4. The analyst noted that Broadcom Inc. (NASDAQ:AVGO) delivered another beat in the fourth quarter and in the near-term, sales growth is re-accelerating to 20%, offering “even more confidence”.
According to the Q4 database of Insider Monkey, 62 funds were bullish on Broadcom Inc. (NASDAQ:AVGO), up from 50 funds in the prior quarter. Amid the movement of elite funds in Broadcom Inc. (NASDAQ:AVGO), a significant shareholder of the company was Cantillon Capital Management, with more than 1 million shares worth $669.40 million.
Here is what Richie Capital Group has to say about Broadcom Inc. (NASDAQ:AVGO) in its Q4 2021 investor letter:
“Broadcom (AVGO – up 36.5%) – The semiconductor device manufacturer reported an outstanding Fiscal Q4. Results (and guidance) exceeded Wall Street analyst expectations, and the company raised its dividend by 14% and announced a new stock-repurchase program. Semiconductor related revenue grew 17% while software revenue grew 8%. On the negative side, it was rumored that Apple, their largest customer, is making plans to develop their own wireless chips. This would be a blow to Broadcom. However, AVGO has a $15 billion contract with Apple that is good through 2023 and includes radio frequency parts such as amplifiers, filters and switches.”
2. Block, Inc. (NYSE:SQ)
Number of Hedge Fund Holders: 96
Block, Inc. (NYSE:SQ) is a California-based payments technology company that has climbed close to 44% in the last month, owing to commercial success across its Cash App and strong Q4 results. The company is also making meaningful headway in the crypto space.
James Langevin, the U.S. Representative for Rhode Island’s 2nd congressional district, bought shares of Block, Inc. (NYSE:SQ) on February 2, valued at between $50,001 to $100,000. The transaction was reported on March 4.
On March 11, Mizuho analyst Dan Dolev lowered the price target on Block, Inc. (NYSE:SQ) to $180 from $210 and kept a Buy rating on the shares. The analyst upgraded his Block, Inc. (NYSE:SQ) rating after the company published its Q4 results. He noted that payments stocks appear best positioned within technology to gain in the second half of 2022, as the two-year revenue growth will inflect positively in the coming quarters.
Among the hedge funds tracked by Insider Monkey, ARK Investment Management is one of the leading shareholders of the company, with 6.1 million shares worth approximately $998 million. Overall, 96 hedge funds were bullish on Block, Inc. (NYSE:SQ) at the end of the fourth quarter of 2021.
Here is what Baron FinTech Fund has to say about Block, Inc. (NYSE:SQ) in its Q4 2021 investor letter:
“High exposure to lagging E-commerce companies and underperformance of Block, Inc. (formerly Square, Inc.) in the Payments theme were the only material detractors from relative performance. E-commerce stocks lagged as a return to in-store shopping caused online shopping growth to moderate. Block was the second largest detractor due to slowing growth in the Cash App segment and greater skepticism about the growth prospects for the pending acquisition of Afterpay.”
1. NVIDIA Corporation (NASDAQ:NVDA)
Number of Hedge Fund Holders: 110
NVIDIA Corporation (NASDAQ:NVDA) has gained 14.30% in the last month amid the global shortages of semiconductors and chips. NVIDIA Corporation (NASDAQ:NVDA) is a California-based manufacturer of semiconductors, graphics processing units, graphics cards, consumer electronics, video games, and computer hardware.
Walter Schrader, the U.S. representative for Oregon’s 5th congressional district, purchased NVIDIA Corporation (NASDAQ:NVDA) shares on February 22, worth somewhere between $1,001 and $15,000. The transaction was disclosed in a Period Transaction Report dated March 1.
On March 21, BMO Capital analyst Ambrish Srivastava kept an Outperform rating and a $375 price target on NVIDIA Corporation (NASDAQ:NVDA) ahead of its analyst day, noting that the event in the past has served as a positive catalyst for the shares. The analyst expects the company to emphasize on more use cases and customer wins in the Omniverse space.
Elite hedge funds hold large stakes in NVIDIA Corporation (NASDAQ:NVDA). In Q4 2021, 110 funds were bullish on NVIDIA Corporation (NASDAQ:NVDA), up from 83 funds in the earlier quarter. Fisher Asset Management owns a significant stake in the company, with shares worth $1.50 billion.
Here is what Saturna Capital Amana Funds has to say about NVIDIA Corporation (NASDAQ:NVDA) in its Q4 2021 investor letter:
“Concerning the stock market, we avoid short-term predictions. But what of the next decade? A theme since the start of the pandemic has been the big getting bigger. Nvidia carved out a strong business, but we do not view its position as unassailable given evolving markets and capable competitors.”
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Disclosure: None. 10 Stocks US Politicians Bought Before Russia’s Attack on Ukraine is originally published on Insider Monkey.
