Tracking congressional trading habits is becoming more critical every day. Not only do members of Congress tend to outperform the broad market, but there are an increasing number of products tailored to this strategy. Among them are ETFs like the Unusual Whales Subversive Republican Trading ETF (BATS: KRUZ) and the like-minded Unusual Whales Subversive Democratic Trading ETF (BATS: NANC), whose ticker symbols evoke imagery of Ted Cruz and Nancy Pelosi, two well-known congressional traders. The focus today is the three most actively bought stocks by Congress people over the previous 90 days.
Nancy Pelosi Buys NVIDIA
NVIDIA (NASDAQ: NVDA) is the stock most bought by Congress members this summer. MarketBeat.com tracks seven transactions by five members, including Nancy Pelosi. Members from both parties are buying, with total purchases estimated at just over $6 million. Pelosi made her purchase in June and July and is likely showing a loss in mid-September; she also made the largest investment. The other members purchased in July, August, and early September, with Republican Marjorie Taylor Greene making three purchases in late August and early September.
Members of Congress are buying NVIDIA because they know it is the leading supplier of AI-centric GPUs and the software and services to support them, which is what matters. Other GPU manufacturers have competitive products but do not have NVIDIA's full-stack support and infrastructure built, including CUDA, which is the bit that makes its GPUs work so well for AI. The takeaway is that NVIDIA will continue to be in high demand as next-gen data centers like Oracle’s are built out. An expanding addressable market will be among the drivers for NVIDIA over the next year. Coincidentally, members of Congress have a say about which countries can buy NVIDIA’s most advanced chips.
NVIDIA has significant support from the broad market and is likely to continue trending in Q4. Not only are institutions buying on balance, but analysts continue to lead the market higher, and retail interest is high. The stock is rated as a Moderate Buy by 42 analysts, and recent activity includes numerous increased price targets. The consensus is up 20% from mid-June to mid-September, implying a 20% upside for the stock price.
Broadcom Is Another Hot Chip Stock Bought by Congress
Four members of Congress, including Nancy Pelosi, bought Broadcom (NASDAQ: AVGO) in five transactions this summer. The estimated net is roughly $3 million, with Pelosi making the largest transaction. Senator Shelly Moore Capito (R-WV) made two transactions, buying the semiconductor stock in early July and the other in late August.
Among the drivers for its stock price are its accelerating growth in 2024, the outlook for sustained double-digit growth in 2025, and the capital return. Growth in 2024 is driven by demand in all segments, led by triple-digit gains in the Infrastructure Software business. Growth in 2025 will be supported by AI demand, including an Apple upgrade cycle.
Congress Members Insure Their Portfolios with Chubb
Three members of Congress bought Chubb Limited (NYSE: CB) four times for a total investment of nearly $100 thousand. The investment is small compared to NVIDIA and Broadcom but no less significant given Chubb’s history. The history includes consistent growth, healthy cash flow, sustainable capital returns, and an upwardly trending stock price. It also contains a low beta of 0.39, which indicates extremely low volatility relative to the S&P 500. The S&P 500 is still in an uptrend but has entered a period of consolidation marked by increased fear, so portfolio protection is a good idea.
Chubb is a Dividend Aristocrat, another factor that speaks volumes to investors. Dividend Aristocrats have increased their dividend distribution annually for at least 25 years. A 25-year history of distribution increases is hard to achieve because of the time involved and business cycle risks. The takeaway for inventors is that Dividend Aristocrats are proven reliable dividend stocks, and this one has a robust outlook for sustainability. The payout ratio is a low 16%, with the distribution growth rate trailing earnings growth, a dynamic that ensures distribution growth can continue for another twenty-five years.
