In this article, we discuss the 10 stocks that US Politicians are selling.
Recession fears in the United States stock market have been gathering pace for the past few weeks, even as economists surveyed by news platform Bloomberg expect inflation numbers to post a slower increase in the month of July compared to the figures for the same period last year and last month. Per the survey, the US consumer price index will jump 8.7% annually in July, compared to 9.1% in July 2021. This would represent a 0.2% increase compared to June 2022, against the 1.3% monthly rise recorded last year.
Major US stocks like Apple Inc. (NASDAQ:AAPL), Netflix, Inc. (NASDAQ:NFLX), and AT&T Inc. (NYSE:T) are already feeling the heat of a slowing economy, with all three registering declines in their share price over the past six-month period. In this overall uncertain macro environment, interest in the stock trades of US politicians, who are often privy to insider information, has risen. A website that tracks the trades on Capitol Hill reveals that US politicians from the states of Tennessee, North Carolina, and Colorado have been especially active at the market.
In the past month, three politicians from Tennessee have disclosed a total of 42 trades with a volume of around 751,000. In North Carolina, 2 politicians have disclosed 14 trades with a volume over 1 million. In Colorado, 1 politician has disclosed ten trades with a volume of more than 154,000. Some of the biggest players at the stock market from among the Congress over the past thirty days have been Diana Harshbarger, Virginia Fox, Alan Lowenthal, and Steve Cohen, among a host of others.
Our Methodology
The companies listed below were picked from the Periodic Transaction Report(s) that US Congress members who trade stocks are obliged to file. It is important to clarify that the companies were picked from the public record of investments US Congress members and their families have made in the past few months. The purchases may not have been made by the Congress members themselves but only disclosed on behalf of their families. Data from around 900 elite hedge funds tracked by Insider Monkey in the first quarter of 2022 was used to identify the number of hedge funds that hold stakes in each firm.
Copyright: carlosyudica / 123RF Stock Photo
US Politicians are Selling These Stocks
10. DuPont de Nemours Inc (NYSE:DD)
Number of Hedge Fund Holders: 50
DuPont de Nemours Inc (NYSE:DD) provides tech-based materials and solutions. US House member Bob Gibbs on August 8 revealed a transaction related to DuPont de Nemours Inc shares worth somewhere between $1,000 and $15,000. In the filing, disclosed a day after the transaction, Gibbs detailed that he had sold the shares of the materials and solutions firm.
On August 8, Citi analyst P.J. Juvekar maintained a Buy rating on DuPont de Nemours Inc stock and raised the price target to $75 from $72, appreciating the second quarter earnings results of the company.
At the end of the first quarter of 2022, 50 hedge funds in the database of Insider Monkey held stakes worth $1.4 billion in DuPont de Nemours Inc, compared to 56 in the previous quarter worth $1.9 billion.
Just like Apple Inc., Netflix, Inc., and AT&T Inc., DuPont de Nemours Inc is one of the stocks on the radar of elite investors.
9. KLA Corporation (NASDAQ:KLAC)
Number of Hedge Fund Holders: 52
KLA Corporation (NASDAQ:KLAC) markets process control and yield management solutions for the semiconductor industry. According to the latest filings, US House member Zoe Longfren sold shares of KLA Corporation worth somewhere around $1,000 and $15,000. The transaction in this regard was disclosed almost a month after it was made on July 8.
On July 28, Deutsche Bank analyst Sidney Ho maintained a Buy rating on KLA Corporation stock and raised the price target to $400 from $385, noting that the firm was benefiting from robust demand despite supply chain headwinds.
At the end of the first quarter of 2022, 52 hedge funds in the database of Insider Monkey held stakes worth $1.8 billion in KLA Corporation, compared to 49 in the previous quarter worth $2.4 billion.
In its Q1 2022 investor letter, Vltava Fund, an asset management firm, highlighted a few stocks and KLA Corporation was one of them. Here is what the fund said:
“We then used the money freed up to, among other things, open three new positions. The stock price declines during the Russian invasion brought a lot of good prices to the market. Out of all the possibilities we considered, we picked the stock of KLA Corporation.
KLA Corporation develops leading-edge equipment and services that enable innovation throughout the electronics industry. It specialises in process management and control in semiconductor manufacturing and the related nano-electronics industries. During manufacturing processes, products must be inspected for defects and correct critical dimensions in order to identify and eliminate possible sources of problems. As customers continue to enforce Moore’s Law, smaller chips must meet more precise specifications, which in turn increases the need for advanced inspection and diagnostic tools. This is a key step within the entire manufacturing process and one in which the company has built a very strong, and in places dominant, global position. We have been watching and waiting for an opportunity to acquire this stock for some time already, and this year’s drop in its price finally prompted us to buy.”
8. DoorDash, Inc. (NYSE:DASH)
Number of Hedge Fund Holders: 52
DoorDash, Inc. (NYSE:DASH) is a logistics platform that connects merchants with consumers. On August 3, US House member Jim Langevin disclosed a transaction related to DoorDash, Inc. stock worth somewhere between $1,000 and $15,000. The member revealed that he had sold the shares of the firm worth the above mentioned amount in late July. The transaction in this regard was made public in early August.
On August 5, Needham analyst Bernie McTernan maintained a Buy rating on DoorDash, Inc. stock and raised the price to $115 from $100, noting that the DashPash initiative of the firm would help it navigate macro uncertainty.
Among the hedge funds being tracked by Insider Monkey, New York-based investment firm Coatue Management is a leading shareholder in DoorDash, Inc., with 5.2 million shares worth more than $618 million.
7. Eli Lilly and Company (NYSE:LLY)
Number of Hedge Fund Holders: 53
Eli Lilly and Company (NYSE:LLY) develops and markets human pharmaceuticals. On August 5, US House member Bob Gibbs disclosed that he had sold Eli Lilly and Company stock worth around $1,000-$15,000. The transaction in this regard took place a day before it was made public.
On August 5, Morgan Stanley analyst Terence Flynn maintained an Overweight rating on Eli Lilly and Company stock with a price target of $395, noting that the recent weakness in the shares was a buying opportunity.
Among the hedge funds being tracked by Insider Monkey, Florida-based investment firm GQG Partners is a leading shareholder in Eli Lilly and Company, with 1.6 million shares worth more than $485 million.
In its Q1 2022 investor letter, Baron Funds highlighted a few stocks and Eli Lilly and Company was one of them. Here is what the fund said:
“Eli Lilly and Company is a global pharmaceutical company with a diverse offering primarily focused on therapeutics. Performance was strong mostly due to consistent financial growth powered by its core diabetes (and future obesity) franchise, as well as the constant drumbeat surrounding the Alzheimer’s therapeutic market, of which Eli Lilly and Company has one of the three potential winning blockbuster candidates in Donanemab. We retain conviction in Eli Lilly given the company’s strong long-term growth outlook.”
6. Medtronic plc (NYSE:MDT)
Number of Hedge Fund Holders: 54
Medtronic plc (NYSE:MDT) makes and sells device-based medical therapies. On August 7, US House member Alan Lowenthal disclosed that he had sold Medtronic plc (NYSE:MDT) stock worth somewhere between $1,000 to $15,000. The transaction in this regard took place in late July.
On July 18, Stifel analyst Rick Wise maintained a Buy rating on Medtronic plc (NYSE:MDT) stock and lowered the price target to $105 from $125, backing the potential of the firm for broad-based growth reacceleration.
At the end of the first quarter of 2022, 54 hedge funds in the database of Insider Monkey held stakes worth $1.9 billion in Medtronic plc (NYSE:MDT), compared to 55 in the previous quarter worth $2.7 billion.
Along with Apple Inc., Netflix, Inc., and AT&T Inc., Medtronic plc (NYSE:MDT) is one of the stocks that hedge funds are monitoring.
Here is what Polen Capital has to say about Medtronic plc (NYSE:MDT) in its Q1 2022 investor letter:
“Ireland-based Medtronic plc (NYSE:MDT) is a leading health care company focused on supplying many important life-saving devices like pacemakers, defibrillators, and insulin pumps. This is another company with attractive pricing power and a business model that can hold up well during inflationary periods. Medtronic plc (NYSE:MDT) has increased market share across almost 70% of its portfolio since the start of the pandemic, which is a higher percentage than even before the pandemic. With growth-oriented companies falling out of favor over the quarter, the stock’s relatively discounted valuation (at approximately 19x earnings) also bolstered its performance.”
5. Costco Wholesale Corporation (NASDAQ:COST)
Number of Hedge Fund Holders: 61
Costco Wholesale Corporation (NASDAQ:COST) owns and runs membership warehouses. According to the latest filings, US House member David McKinley disclosed a transaction related to Costco Wholesale Corporation stock worth around $1,000-$15,000 on August 3. The politician revealed that his wife had sold the shares of the firm worth the above mentioned amount in late July.
On August 4, Oppenheimer analyst Rupesh Parikh maintained an Outperform rating on Costco Wholesale Corporation stock and raised the price target to $600 from $535, noting that the firm was continuing to gain meaningful share in the retail sector.
At the end of the first quarter of 2022, 61 hedge funds in the database of Insider Monkey held stakes worth $5.41 billion in Costco Wholesale Corporation, up from 57 in the preceding quarter worth $5.40 billion.
In its Q4 2021 investor letter, ClearBridge Investments, an asset management firm, highlighted a few stocks and Costco Wholesale Corporation was one of them. Here is what the fund said:
“Portfolio gains were led by a diverse group of contributors. Also in consumer discretionary, Costco Wholesale Corporation, which operates a chain of membership-only big-box retail stores, continues to impress as it takes to share and becomes more relevant for the consumer even as the world opens up.”
4. Airbnb, Inc. (NASDAQ:ABNB)
Number of Hedge Fund Holders: 66
Airbnb, Inc. (NASDAQ:ABNB) operates an online travel platform. On August 3, US House member Jim Langevin disclosed a sale transaction related to Airbnb, Inc. stock worth somewhere between $1,000 and $15,000. The member revealed that he had exercised CALL options on the stock with a strike price of $120 that were expiring on August 5. The transaction in this regard took place in late July.
On August 3, RBC Capital analyst Brad Erickson maintained a Sector Perform rating on Airbnb, Inc. stock and lowered the price target to $115 from $175, noting that the growth and margin leverage of the firm remain solid.
Among the hedge funds being tracked by Insider Monkey, Chicago-based investment firm Citadel Investment Group is a leading shareholder in Airbnb, Inc., with 3.3 million shares worth more than $575 million.
In its Q3 2021 investor letter, Tollymore Investment Partners, an asset management firm, highlighted a few stocks and Airbnb, Inc. was one of them. Here is what the fund said:
“Today disruptors are not typically seeking to replace incumbents entirely. Rather, they break the links in the customer journey, in doing so better aligning monetisation with value creation and minimising externalities. For example, Airbnb, Inc. broke the link between staying in residential property and owning it. Airbnb, Inc. is a specific example of a business model innovation which separated asset use from ownership. This is hardly a novel idea; it’s called renting. Rental models lend themselves to assets which are expensive and durable, and where usage is infrequent.”
3. Block, Inc. (NYSE:SQ)
Number of Hedge Fund Holders: 84
Block, Inc. (NYSE:SQ) provides payments services. On August 3, US House member Jim Langevin disclosed a transaction related to Block, Inc. stock worth somewhere between $1,000 and $15,000. The member revealed that he had exercised CALL options on the stock with a strike price of $70 that were expiring in late July. The sale transaction in this regard took place on July 22.
On August 8, Mizuho analyst Dan Dolev maintained a Buy rating on Block, Inc. stock and lowered the price target to $125 from $135, noting the second quarter earnings of the firm were fine but lacked the pop of the previous quarters.
At the end of the first quarter of 2022, 84 hedge funds in the database of Insider Monkey held stakes worth $6.1 billion in Block, Inc., compared to 96 in the preceding quarter worth $5.9 billion.
In its Q1 2022 investor letter, Farrer Wealth Advisors, an asset management firm, highlighted a few stocks and Block, Inc. was one of them. Here is what the fund said:
“Block, Inc. (formerly Square): We ‘adopted’ Block’s stock after the company bought Afterpay, which we were investors in. We had been trimming the Afterpay position throughout 2021 and trimmed again after the acquisition, so the position was quite small. We held onto that small portion, as we did think the acquisition made sense and were excited to see the two companies integrate and for Block, Inc. to create a closed loop network between merchants and consumers. However, the market punished most highly valued tech stocks over the last months, and we saw the position move against us by over 50%. We are firm believers that when a stock goes against you by 50%+, you need to do something about it. Either trim/sell and reinvest or buy more. In the case of Block, the original reason for holding was to see how the acquisition and integration with Afterpay panned out. The market did not give us the time to see this play out, thus we were not comfortable adding more to the position. Further for the stock to recover to our purchase price, we felt the company’s valuation would need to command a future exit multiple that the market would be unlikely to pay in this environment. Given this, we exited the remainder of the position.”
2. UnitedHealth Group Incorporated (NYSE:UNH)
Number of Hedge Fund Holders: 103
UnitedHealth Group Incorporated (NYSE:UNH) operates as a diversified healthcare firm. Per latest disclosures, US House member David McKinley sold UnitedHealth Group Incorporated stock worth around $1,000-$15,000. The transaction, revealed on behalf of his wife, was disclosed almost a month after it was made.
On July 25, Argus analyst David Toung maintained a Buy rating on UnitedHealth Group Incorporated stock and raised the price target to $650 from $580, appreciating the second quarter earnings beat of the firm and the guidance raise.
At the end of the first quarter of 2022, 103 hedge funds in the database of Insider Monkey held stakes worth $12.8 billion in UnitedHealth Group Incorporated, compared to 96 in the preceding quarter worth $13.6 billion.
In its Q2 2022 investor letter, Wedgewood Partners, an asset management firm, highlighted a few stocks and UnitedHealth Group Incorporated was one of them. Here is what the fund said:
“UnitedHealth Group Incorporated also contributed to performance during the quarter. United’s operating income grew +3% on difficult year-ago comparisons as benefits members utilized more services compared to last year. Optum Health grew operating income +40% as more patients are enrolled in the Company’s value-based care services. The Company estimates nearly a third of all medical care is unnecessary and represents an opportunity to capture savings for both patients. Optum’s integrated platform of patient data, IT, and service providers are focused on driving out these unnecessary costs and should serve as the engine for long-term, mid-teens earnings per share growth.”
1. Amazon.com, Inc. (NASDAQ:AMZN)
Number of Hedge Fund Holders: 271
Amazon.com, Inc. (NASDAQ:AMZN) is a diversified technology firm with core interests in e-commerce. On August 5, US House member Michael Burgess disclosed that he had sold Amazon.com, Inc. stock worth somewhere between $15,001-$50,000. The transaction in this regard took place two weeks before it was made public.
On August 5, DA Davidson analyst Tom Forte maintained a Buy rating on Amazon.com, Inc. stock with a price target of $151, noting that the firm would be more willing for merger and acquisition activity under new top management.
Among the hedge funds being tracked by Insider Monkey, London-based investment firm Citadel Investment Group is a leading shareholder in Amazon.com, Inc., with 4 million shares worth more than $13 billion.
In its Q2 2021 investor letter, Oakmark Funds, an asset management firm, highlighted a few stocks and Amazon.com, Inc. was one of them. Here is what the fund said:
“Amazon.com, Inc. is the leading e-commerce and cloud-computing provider in the world. Two-thirds of U.S. households are Amazon Prime subscribers, and over half of all online product searches now start on Amazon.com, Inc.. We believe the company’s strong customer loyalty and massive infrastructure are significant barriers to entry in a growing e-commerce market. Separately, Amazon Web Services (“AWS”) controls nearly half of the market in cloud computing. We believe AWS has become utility-like in nature and scale and we expect healthy growth moving forward as IT workloads continue moving to the cloud. More recently, concerns about rising investment spending have weighed on the stock-as they have in times past-providing us another opportunity to purchase shares at a very attractive price. At our purchase price and valuing AWS like its peers, an investor isn’t paying much of anything for the immensely valuable e-commerce franchise.”
You can also take a peek at 10 Best Healthcare Dividend Stocks to Buy Now and 10 Dividend Stocks with Over 20 Years of Dividend Increases.
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This article is originally published at Insider Monkey.
