Although controversial and viewed by some as a conflict of interest, members of Congress continue to actively trade stocks. And the latest data on those trades reveals that many elected representatives managed to outperform the market in 2022. While 2022 saw all the major indices in the U.S. suffer their worst downturn since the 2008 financial crisis, many members of Congress earned strong gains last year.
Data released by the website Unusual Whales shows that Representative Patrick Fallon (R-Texas), for example, earned 51.6% on his investments in 2022, while Representative Debbie Wasserman-Schultz (D-Florida) saw a gain of 50.8%. Other members of Congress posted gains of 10% or greater as the benchmark S&P 500 index declined 19% on the year, and the technology-laden Nasdaq fell 33%.
Some members of Congress are extremely active when it comes to buying and selling stocks. Representative Michael McCaul (R-Texas) made more than 1,600 transactions worth as much as $176 million in 2022.
So what’s the secret? Which stocks do members of Congress hold in their personal portfolios? Here is a list of the top five stocks purchased by Congress in 2022.
Top Stocks Held by Congress in 2022: Nvidia (NVDA)
Members of Congress seemed committed to the principle of buying low as they purchased $5.6 million worth of shares in semiconductor and microchip company Nvidia (NASDAQ:NVDA) as the stock declined 46% over the past year. Santa Clara, California-based Nvidia, whose chips are used in everything from electric vehicles to supercomputers, was a darling of the Covid-19 pandemic.
However, NVDA stock led the semiconductor sector lower in 2022 as concerns mounted about slowing demand for semiconductors and microchips, particularly in personal computers, and as supply chain issues hurt production. But elected representatives continue to have faith in Nvidia despite the downturn, judging by the fact that it was the fifth most purchased stock among members of Congress in 2022.
Alphabet (GOOG, GOOGL)
Another tech name that members of Congress gravitated to in 2022 was Alphabet (NASDAQ:GOOG, GOOGL), the parent company of the search engine Google. The Unusual Whales report shows that federal lawmakers bought $5.7 million worth of Alphabet stock last year as it fell to its most affordable level since its 2004 initial public offering (IPO).
A weakening market for online advertising led to mixed financial results from Alphabet and shook confidence in the company and its stock. As a result, shares of GOOGL have sunk 36% in the past 12 months, dragging the price down to nearly $85. Additionally, Alphabet split its stock on a 20-for-1 basis last summer, which helped to dramatically lower the price. At the start of 2022, GOOGL stock had been trading at more than $2,000 per share.
Congress appears to have taken advantage of both the stock split and price decline and bought Alphabet stock with a vengeance in 2022.
Top Stocks Held by Congress in 2022: Tesla (TSLA)
This might be a decision many members of Congress regret. In 2022, elected officials bought $6 million worth of shares in electric vehicle maker Tesla (NASDAQ:TSLA). For the first 11 months of last year, that probably seemed like a smart move. However, in December 2022, TSLA stock fell more than 30%. The stock is now down nearly 70% over the last year and trading at $113 a share.
Sentiment towards TSLA stock appears to be getting worse by the day. Analysts and investors are worried about rising competition in the electric vehicle space and that the competitive advantage Tesla has enjoyed for more than a decade is evaporating. Those concerns seemed to be justified by the fact that Tesla continues to miss its delivery targets and is offering steep discounts on its electric vehicles in markets around the world, notably in China.
Still, Tesla proved to be one of the most popular investments among members of Congress in 2022.
Walt Disney Co. (DIS)
It had arguably its worst year ever in 2022, but that didn’t stop members of Congress from purchasing $6.2 million worth of shares in the Walt Disney Company (NYSE:DIS) in 2022. Disney began last year dealing with continued Covid-19 outbreaks that forced its theme parks to operate at reduced capacity and ended 2022 with chief executive officer (CEO) Bob Chapek being ousted and former head honcho Robert Iger returning to lead the Mouse House.
In between, the company had to deal with slowing subscriber growth at its Disney+ streaming service and political controversy in Florida, where its main theme park is based. All the issues contributed to a 40% drop in DIS stock over the last 12 months. However, members of Congress seemed unfazed by the issues impacting the company and were content to buy the dip in Disney stock. The return of Robert Iger at the end of last year has brightened the outlook for Disney, and the stock appears to be responding, gaining 10% during the first trading week of 2023.
Apple (AAPL)
Tied with Disney as the most purchased stock by members of Congress in 2022 is consumer electronics giant Apple (NASDAQ:AAPL). Elected representatives bought $6.2 million worth of AAPL stock in 2022, according to Unusual Whales. Apple’s share price is down 25% in the last year, including a nearly 10% drop in December 2022.
While many people, including politicians in Washington, D.C., remain bullish on AAPL stock, the company’s share price has suffered over worries of slowing demand for its iPhone, smartwatch, and Mac computer. Apple has also endured some significant production issues in China as Covid-19 lockdowns disrupted one of its largest manufacturing plants and led to clashes between workers and police.
Much was made of Apple’s market capitalization falling below $2 trillion to start 2023. However, members of Congress seem to retain faith in Apple’s stock, buying the shares heavily on the way down.
Originally published on InvestorPlace.com
On the date of publication, Joel Baglole held long positions in NVDA, GOOGL, DIS and AAPL. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
