3 Hot Stocks Bought by Members of Congress: Follow the Money

Congress podium

Key Points

  • Nancy Pelosi bought Palo Alto Networks before and after the 27% stock price implosion. 
  • Victoria Spartz is buying into Simon Property Group's long-term appeal. 
  • Kevin Hearn is an active investor; he bought JPM and sold these two stocks analysts are bullish on. 
  • 5 stocks we like better than Palo Alto Networks

The STOCK Act of 2012 was supposed to halt insider trading by members of Congress, but let’s be honest. The STOCK Act can’t really stop Congresspeople from trading on insider knowledge; they’re in a position to get it, which will influence investment decisions. What the act did accomplish was shining the light on what members of Congress are buying and selling, which can be a treasure trove of information for investors. Today, we’re looking at the three stocks most bought by Members of Congress in February and whether they might be a good investment for their constituencies. 

Nancy Pelosi Buys Palo Alto Networks 

Representative Nancy Pelosi (D-CA) bought Palo Alto Networks NASDAQ: PANW in February not once but twice, which is a telling indicator. The first purchase was before the Q4 release, the 2nd after, so she and her investment advisors viewed the post-release plunge as a buying opportunity and time to leverage the position. Her first purchase, reported in a range of $500K to $1 million, lost 27% after the release, so it took courage to double down on the position.

The good news for her and her constituency is that PANW shares are rebounding solidly. The 27% stock price implosion was a knee-jerk reaction to a strategic decision that will drive long-term value for shareholders. Palo Alto Networks will offer free or reduced services to attract new clients. The takeaway from the report is that the business is solid, growth is still in the double-digit range, and the cash flow and balance sheet are strong enough to weather the brief interruption. Analysts have forecasted that the impact on this tech stock will last twelve to eighteen months. 

Palo Alto’s market was right-sized by the strategy shift. The news sparked a round of analysts' downgrades that aided the stock price implosion, but some analysts raised targets and the rebound has the market aligned with consensus. Investors should expect volatility, but Palo Alto Networks' stock price will recover. Recovery could gain momentum later this year if the shift bears fruit. 

Stock chart PANW

Victoria Spartz Buys Simon Property Group 

Representative Victoria Spartz (R-IN) bought Simon Property Group NYSE: SPG twice in February, extending a trend she began last year. Ms. Spartz has only bought SPG shares since the middle of 2021 and has built a solid position. Among the reasons she may have focused on this company is its position as a REIT and the 5% dividend yield; the stock performance was tepid in the same period; however, it has been gaining traction. 

Among the attractions of SPG stock is its value. It is viewed as cheap among REITs and produces solid cash flows. The company recently announced a new $2 billion stock buyback program because of it, worth about 4% of the market cap, and the dividend is worth another 5%. Recent results include accelerating top-line growth and bottom-line strength. Eight analysts rate SPG a consensus Moderate Buy and support the market with upward price target revisions. 

SPG stock chart

Kevin Hearn Buys JPMorgan Chase

Kevin Hearn bought JPMorgan Chase NYSE: JPM a single time in the last 30 days, but don’t read too much into that. Mr. Hearn bought three other stocks the same day and has a history of active buying. His stats include an average of 100 trades per year on 121 companies, and he is mostly buying. His most recent sales are Vuzix NASDAQ: VUZI and Exact Sciences NASDAQ: EXAS. Vuzix is an augmented reality play heading for penny-stock territory; Exact Sciences is a cancer screening and diagnostics company also in decline. Both stocks are rated Moderate Buy by the analysts and have significant upside potential. 

JPMorgan stock is heading higher after a solid earnings report revealing NII is still flowing strongly. Because the FOMC isn’t expected to cut rates soon, NII should continue positively impacting results through mid-year. Analysts rate it a Moderate Buy, leading the market higher with revisions. 

JPM stock chart

Should you invest $1,000 in Palo Alto Networks right now?

Before you consider Palo Alto Networks, you'll want to hear this.

MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and Palo Alto Networks wasn't on the list.

While Palo Alto Networks currently has a "Moderate Buy" rating among analysts, top-rated analysts believe these five stocks are better buys.

View The Five Stocks Here

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Companies Mentioned in This Article

CompanyMarketRank™Current PricePrice ChangeDividend YieldP/E RatioConsensus RatingConsensus Price Target
Vuzix (VUZI)
1.1196 of 5 stars
$1.34+2.3%N/A-1.70Moderate Buy$3.00
Exact Sciences (EXAS)
4.3895 of 5 stars
$63.24-0.5%N/A-55.47Moderate Buy$97.44
JPMorgan Chase & Co. (JPM)
4.1896 of 5 stars
$193.08+0.5%2.38%11.66Moderate Buy$192.05
Simon Property Group (SPG)
3.7953 of 5 stars
$142.82-0.7%5.46%20.46Moderate Buy$140.22
Palo Alto Networks (PANW)
4.5979 of 5 stars
$293.82+0.1%N/A45.91Moderate Buy$314.82
Compare These Stocks  Add These Stocks to My Watchlist 

Thomas Hughes

About Thomas Hughes

  • tmhughes.writeon@gmail.com

Contributing Author

Technical and Fundamental Analysis

Experience

Thomas Hughes has been a contributing writer for MarketBeat since 2019.

Areas of Expertise

Technical analysis, the S&P 500; retail, consumer, consumer staples, dividends, high-yield, small caps, technology, economic data, oil, cryptocurrencies

Education

Associate of Arts in Culinary Technology

Past Experience

Market watcher, trader and investor for numerous websites. Founded Passive Market Intelligence LLC to provide market research insights. 


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