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Democrats and Corporate Insiders are Buying These 10 Stocks

In this article, we will take a detailed look at Democrats and Corporate Insiders are Buying These 10 Stocks. For a quick overview of such stocks, read our article Democrats and Insiders are Buying These 5 Stocks.

Ethical questions and concerns related to politicians trading stocks grew louder during the pandemic, where analysts saw various cases of Congress members and Senators buying or selling stocks directly impacted by the coronavirus crisis. A research paper titled “Failures of the STOCK Act and the Future of Congressional Insider Trader Reform” says that in February 2020, Senator Richard Burr sold stocks worth between $628,000 and $1,720,000, while his brother in-law dumped stocks worth between $97,000 and $280,000. But what’s wrong with selling stocks? The research paper highlights that the Senator had received special briefings on the COVID-19 crisis and attended a meeting with former Center for Disease Control Director Robert Redfield and Dr. Anthony Fauci a few days before these stock sales. The Senator allegedly foresaw the crisis brewing and sold his stocks to avoid a selloff that stuck the US stock market hard.

Do Politicians Benefit from Insider Information? Data Says Yes

There have been various instances where politicians in America were seeing talking, lobbying, actively participating in discussions about issues that directly impact the stocks in their portfolios. For example, former US Senator from Georgia David Perdue was part of the Senate’s cybersecurity subcommittee back in 2020. An analysis by The New York Times showed that Perdue had bought and sold cybersec company FireEye’s stock around 60 times starting 2016. Perdue back in 2020 was citing FireEye’s reports on cyber threats to the US and joined a group of lawmakers who wrote to a letter to Gen. Paul Nakasone, head of the military’s U.S. Cyber Command, and Christopher Krebs, the top Homeland Security Department official at the Cybersecurity and Infrastructure Security Agency, in April 2020, voicing their concerns regarding cyber threads from China, Iran, Russia and North Korea.

The Times’ analysis said that out of the over 2,000 stock trades of Senator Perdue, nearly half “occurred while he sat on the cybersecurity panel, a role that potentially could have provided him with nonpublic information about companies like FireEye.” During this time, FireEye also received a subcontract worth about $30 million with the Army Cyber Command, which operated at Fort Gordon, in the Senator’s home state of Georgia.

FireEye announced to acquire Mandiant in December 2013. Later, Mandiant was spun out of FireEye as part of a $1.2 billion deal with private equity firm Symphony Technology Group. In 2022, Google to revealed plans to acquire Mandiant for approximately $5.4 billion.

Performance and Returns of Politicians’ Stock Picks

But moving beyond individual stock trades, what about the returns or performance of stocks owned by American politicians. Do US Congress members really beat the market? A 2011 study titled Abnormal Returns From the Common Stock Investments of Members of the U.S. House of Representatives authored by Alan J. Ziobrowski and James W. Boyd provides some key insights. The study analyzed about 16,000 common stock trades by about 300 House delegates from 1985 to 2001. The results showed that stocks owned by House Representatives “earn significant positive abnormal returns.”

“A portfolio that mimics the purchases of House Members beats the market by 55 basis points per month (approximately 6% annually).”

The research paper’s authors also point to another similar study they did on stock returns of US Senators:

“They examine abnormal returns from the common stock investments of U.S. Senators from 1993 to1998. Using the calendar-time portfolio approach, a portfolio that mimics the purchases of U.S. Senators outperforms the market by 85 basis points per month (approximately 10% per year). The positive abnormal returns for Senate stock acquisitions are both economically large and statistically significant. Although Democrats outperform Republicans, the researchers find no statistical difference between the abnormal returns earned by Members of the two political parties. However, the investments of Senators in their first term of office significantly outperformed the investments of the most senior Senators who had served more than two terms. On the other hand, Members of the House of Representatives are not Senators. Being one of 435, as opposed to one of 100, is likely to result in a significant dilution of power relative to members of the Senate. In addition, the filibuster rules in the Senate further amplify the influence of each Senator since the passage of controversial legislation in the Senate effectively requires the support of a super majority (60 Senators) under threat of filibuster. Thus, assuming that privilege is derived from power, the fact that Senators have been shown to enjoy a significant information advantage over ordinary investors (and the propensity to use it), would not necessarily lead us to expect that Members of the House of the Representatives enjoy the same access to financial information.”

Methodology

For this article we first scanned the holdings of the Subversive Unusual Whales Democratic ETF (NANC), which invests in stocks bought or sold by Democratic members of Congress and their spouses. From these stocks we picked 10 companies that saw insider buying activity over the past one year. Why is it important to see what insiders are doing? 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.

10. Dollar Tree Inc (NASDAQ:DLTR)

Unusual Whales Democratic ETF (NANC) Stake: $78,709.35

Dollar Tree’s CFO Jeff Davis on April 1 bought 1,800 shares of the company at $136 per share. Since then the stock is down 12.6%. Daniel J. Heinrich, a director at the company, bought 1,000 shares of the company on March 18 at $127.85 per share.

Madison Investors Fund stated the following regarding Dollar Tree, Inc. (NASDAQ:DLTR) in its first quarter 2024 investor letter:

Dollar Tree, Inc. (NASDAQ:DLTR) underperformed in the quarter following a messy earnings report that showed inconsistent results at Family Dollar. Given it is still early in Family Dollar’s turnaround effort, we had been expecting the potential for choppy performance, and weren’t that surprised by the result. What we found more notable were the strong results from the Dollar Tree stores, as they are the primarily value driver for the overall company.”

9. Union Pacific Corp (NYSE:UNP)

Unusual Whales Democratic ETF (NANC) Stake: $86,797.92

Union Pacific CEO Jim Vena on November 21 bought 4,500 UNP shares at $222 per share. Since then the stock is up 9%.

Cooper Investors made the following comment about Union Pacific Corporation (NYSE:UNP) in its Q3 2023 investor letter:

“The major focus in Texas was spending a day visiting operations of Union Pacific Corporation (NYSE:UNP), a Stalwart investment made earlier this year.

Our investigations into the railroad industry have felt like a history lesson of the late 19th Century, a peek into the Gilded Age. At this time railroads became a transformative force that connected the East Coast to the Western frontier, pushing the economic potential of US industry and commerce to new heights. Over a century later and despite technological upheaval, the freight railroads of North America still feel just as relevant and a key part of the new industrial age.

To own, operate and invest in a railroad is to be a part of the lifeblood of North America. It is to witness the movement of grain, concrete, steel, wood, energy, autos, and shipping containers across vast distances. These are irreplaceable assets that could not be built today, and for the most part have very few substitutes – UNPs tagline “Building America” certainly rings true…” (Click here to read the full text)

8. Corteva Inc (NYSE:CTVA)

Unusual Whales Democratic ETF (NANC) Stake: $90,748.80

Corteva saw heavy insider buying activity in November 2023. Its Executive Vice President, Chief Technology and Digital Officer Sam Eathington bought 1,094 shares of the company at $46.07 per share on November 28. Tim Glenn, Executive Vice President, Seed Business Unit, also snaped up 4,000 shares of the company at $45.99 per share on November 14. Since then the stock is up 20%.

Aristotle Capital’s Value Equity Strategy stated the following regarding Corteva, Inc. (NYSE:CTVA) in its first quarter 2024 investor letter:

Corteva, Inc. (NYSE:CTVA), the seed and crop protection company, was one of the largest contributors. As discussed in last quarter’s commentary, we believed the crop protection business was at or near a cyclical bottom in 2023, as customer destocking followed a 2020-2022 period of robust orders. Share prices have subsequently risen with Corteva’s crop protection sales falling just 5% in the previous quarter, an improved result compared to the 9% full-year decline, accompanied by guidance calling for a return to growth in the second half of 2024. However, as long-term investors, we look past cyclical fluctuations and are encouraged as Corteva further executes on many of the catalysts we identified. These include continued innovation (with over 400 new product launches in 2023) and share gains for the company’s Enlist E3 soybeans, which achieved 58% market penetration in 2023 and became the top-selling soybean technology in the U.S.”

7. Walgreens Boots Alliance Inc (NASDAQ:WBA)

Unusual Whales Democratic ETF (NANC) Stake: $107,616.00

Democratic Congress members and corporate insiders like Walgreens Boots Alliance Inc (NASDAQ:WBA). The Unusual Whales Democratic ETF (NANC) owns 5900 shares of Walgreens Boots Alliance Inc (NASDAQ:WBA). The total value of these shares was $107,616.00. Walgreens Boots Alliance Inc (NASDAQ:WBA) saw insider buying activity earlier this year when Walgreens Boots Alliance Inc’s (NASDAQ:WBA) CEO Timothy C. Wentworth bought 10,000 shares at a price of $24.22 per share. The transaction took place on January 5. Since then the stock is down 27%.

6. Berry Global Group Inc (NYSE:BERY)

Unusual Whales Democratic ETF (NANC) Stake: $141,739.36

Berry Global Group Inc (NYSE:BERY) is one of the stocks Democrats and corporate insiders were buying. Kevin J. Kwilinski, Berry Global Group Inc’s (NYSE:BERY) CEO,  on February 9 loaded up on 2,000 shares of Berry Global Group Inc (NYSE:BERY) at $57.44 per share. Since then the stock is down 4%. The Unusual Whales Democratic ETF (NANC) has a $141,739.36 stake in Berry Global Group Inc (NYSE:BERY).

As of the end of the fourth quarter of 2023, 43 hedge funds out of the 933 funds tracked by Insider Monkey had stakes in Berry Global Group Inc (NYSE:BERY).

Click to continue reading and see Democrats and Corporate Insiders are Buying These 5 Stocks.

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Disclosure. None. Democrats and Corporate Insiders are Buying These 10 Stocks was initially published on Insider Monkey.

AI, Tariffs, Nuclear Power: One Undervalued Stock Connects ALL the Dots (Before It Explodes!)

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AI is eating the world—and the machines behind it are ravenous.

Each ChatGPT query, each model update, each robotic breakthrough consumes massive amounts of energy. In fact, AI is already pushing global power grids to the brink.

Wall Street is pouring hundreds of billions into artificial intelligence—training smarter chatbots, automating industries, and building the digital future. But there’s one urgent question few are asking:

Where will all of that energy come from?

AI is the most electricity-hungry technology ever invented. Each data center powering large language models like ChatGPT consumes as much energy as a small city. And it’s about to get worse.

Even Sam Altman, the founder of OpenAI, issued a stark warning:

“The future of AI depends on an energy breakthrough.”

Elon Musk was even more blunt:

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As demand from AI data centers explodes, this company is gearing up to profit from the most valuable commodity in the digital age: electricity.

The “Toll Booth” Operator of the AI Energy Boom

  • It owns critical nuclear energy infrastructure assets, positioning it at the heart of America’s next-generation power strategy.
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Wall Street is noticing this company also because it is quietly riding all of these tailwinds—without the sky-high valuation.

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The Hedge Fund Secret That’s Starting to Leak Out

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A New Dawn is Coming to U.S. Stocks

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Should I put my money in Artificial Intelligence?

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Click to continue reading…