Anthony Gonzales has sold shares of Amazon (NASDAQ: AMZN), new filings showed.

This Congressman is Selling Amazon Stock Ahead of Q2 Results

Market Commentary

Anthony Gonzales, the U.S. representative for Ohio's 16th congressional district, has sold shares of Amazon (NASDAQ: AMZN), new filings showed.

It was disclosed yesterday that Gonzales sold Amazon stock worth between $250,000 and $500,000 on June 28. This trade is especially interesting in the context of Gonzales being a member of the House Committee for Science, Space, and Technology.

However, it seems that the timing of the trade isn’t ideal as Amazon stock is up 13% since June 28, when Gonzales made the trade.

It is yet unknown if Gonzales’ Amazon trade is connected with the end-of-quarter timing or because the Ohio Congressman is not impressed with the performance of the e-commerce giant. Another reason that may explain Gonzales’ actions is the fact that Amazon is due to report on its second-quarter performance later this week.

Some analysts are calling for a very bad quarter from Amazon as growth slows. Walmart cut its full-year guidance yesterday as the risk of recession is rising, sending Amazon stock lower as investors anticipate potentially a similar course of action from the e-commerce titan given challenging macroeconomic conditions.

Several research firms, including Credit Suisse, Wedbush, and Oppenheimer, slashed their price targets on Amazon stock heading into the results. Wall Street is expecting Amazon to report earnings per share of $0.13 on revenue of $119.18 billion. Investors’ focus is very likely to be on the forward-looking commentary and the guidance itself.

Amazon stock price is down almost 30% since the start of the year and about 25% since the beginning of 2021.

Yesterday’s filing marks the first trade reported by Gonzales since April 2021, when he disclosed a stake in GoodRx Holdings (NASDAQ: GDRX).

Congressman is Selling Amazon Stock Ahead of Q2 Results

Texas Republican Rep. Michael McCaul bought the dip in Five Below Inc. (NASDAQ:FIVE) in June. 

On a filing on July 25, McCaul purchased Five Below stock on June 13. The shares were purchased for $122.28 at a value range of between 50K and 100K

Is Five Below Inc. (NASDAQ:FIVE) Attractive at $122, or Republican Michael McCaul Just Loves the Stock?

Texas Republican Rep. Michael McCaul bought the dip in Five Below Inc. (NASDAQ:FIVE) in June. In a filing on July 25, McCaul purchased Five Below stock on June 13. The shares were purchased for $122.28 at a value range of between 50K and 100K.

On June 27, McCaul was again on Five Below stock, snapping up the stock at $124.19. The stock was in the size range of $1K to $15K.

Looking back, Five Below stock has held to the same level it was when McCaul snapped up the stock. The stock currently trades at $133.79. still keeping the $112 support intact.

Consumer budgets are getting constrained. Austerity measures rank at the top decisions of consumers in a bid to cut costs in an overheating economy. Discount stores could be a go-to place for shoppers, and investors should take note of such stocks.

Five Below Inc. is an American specialty discount store chain. The company claims to sell products at prices less than $5. Only a small collection of products sells above the threshold. However, Five Below, in our assessment, fails the test of a true discount store chain. The stock has lost more than the benchmark Nasdaq-100. There is still more for investors looking to buy the stock.

On valuation, Five Below has a PEG ratio of 1.86. The Miscellaneous industry has a comparable PEG ratio of 2.96. The ratio suggests that Five Below is undervalued relative to the industry.

Five Below results have been mixed. Diluted earnings per share of $0.59 in Q1 was below $0.88 last year but better than $0.58 estimates. Sales still increased to $639.6 million, from $597.8 million in the prior year. The sales missed estimates of $653.3 million.

Five Below stock is down 35.59% year-to-date. The decline happens amid macro concerns. However, Five Below has held a key level of $112 since May as investors circle the stock.

The recent drop in Five Below had Oppenheimer in June commenting on the stock. According to the analysts, Five Below presents a “buying opportunity" in the medium and long-term. The analysts are banking on the company’s store expansion while peers scale down.

Five Below’s fundamentals and technical align at the bottom price. The stock also has an attractive valuation. That could explain the recent buys by McCaul and calls by Oppenheimer valid.

Is five below Inc. attractive at $122, or Republican Michael McCaul just loves the stock?

Is Five Below Inc. Attractive at $122, or Republican Michael McCaul Just Loves the Stock?

Green’s interest in the Energy sector seems to be real given that he already sponsored legislation related to the energy sector. 

Mark Green has disclosed new trades

Mark Green, the United States House of Representatives from the 7th congressional district of Tennessee, has disclosed new trades.

Congressman Green stands for one of the more active stock traders among peers. This time, Green disclosed that he exited a portion of his stake in Energy Transfer LP (NYSE: ET), a US-based company that is engaged in natural gas and propane pipeline transport.

Green’s interest in the Energy sector seems to be real given that he already sponsored legislation related to the energy sector. Congressman Green sits on important committees, namely the Committee on Foreign Affairs and the Committee on Armed Services.

New filings showed that he sold somewhere between $50,000 and $100,000 in ET shares on July 25. He was previously selling smaller amounts, more precisely on June 21, and July 12 and 18.

This is not the first time that Green sold shares of ET after accumulating a stake in the neutral gas company. Congressman previously sold between $250,000 and $500,000 on April 19.

Prior to that, Green was aggressively buying Energy Transfer shares. As many as 7 transactions were disclosed in the period between February 09 and April 14, including a buy position worth between $500,000 and $1 million opened on February 09.

Given that Green was buying Energy Transfer shares starting from late January 2022, in addition to his previous investments in the same company, it is to be believed that he made significant profits.

Energy Transfer stock had traded below $10 a share in late January before surging to print a 27-month high of $12.48 in early May. Shares trade above the $11 a share mark today.

For the first quarter of 2022, the company reported muc stronger-than-expected results. Energy Transfer is due to report on Q2 earnings later this week.

Congressman Green is Cashing in on His Investment in This Energy Stock

The STOCK Act was designed to increase transparency regarding how Congress members trade.

STOCK ACT

Must Know

 or you’ve been using the platform for quite some time, you know that the stock activity of US Congress members is our bread and butter. The transparency of Congressional investment activity is part and parcel of the Stop Trading on Congressional Knowledge (STOCK) Act, which was enacted in April 2012.

Before the STOCK Act in 2012, Congress members’ securities transactions (buying and selling stocks) were a grey area. There was no legislation in place that governed Congress’ use of non-public information to invest in the stock market.

The STOCK Act was designed to increase transparency and ensure Congress members weren’t making trades using non-public information. This legislation implemented mandatory reporting for transactions over $1,000 within 30 days of receiving notice and within 45 days of the transaction date.

Part of this legislation was implementing an SEC online filing procedure akin to Form 4 to notify the public of Congress securities transactions, including transactions by their close family members.

The STOCK Act addressed Congress members’ conflicts of interest surrounding trading by government officials by making these transactions public knowledge. In essence, Capitol Trades has harnessed the reporting requirement, making it easier for investors to track and use this activity to make data-based decisions.

What government officials are included under the STOCK Act?

When it comes to confidential information, Congress members aren’t the only people privy to that knowledge. Under the STOCK Act, the following individuals are required to report their securities transactions and the knowledge behind their actions:

Interest in federal government employees’ stock market activity began well before President Barack Obama signed the STOCK Act into law in 2012. Prior to the introduction of this law, federal officials were only subject to the standard Securities and Exchange Commission (SEC) laws governing insider trading.

These laws did not cover the use of confidential information to make transactions, however as members of government Congress members are privy to insight not granted to common investors – giving them a unique advantage – so a change in law was decided.

Before the introduction of the STOCK Act, there were instances where federal officials used confidential information to make trades. These trades didn’t go unnoticed, and questions arose around their use of confidential data to make trades and their skyrocketing wealth from these trades.

These questions subsequently led to two studies in 2004 and 2011 which examined the portfolios of House and Senate members. In addition to these studies, additional pressure came from an investigation into Congressional insider trading featured in a CBS 

The studies indicated that over the last 20 years, House members’ stock portfolios performed better than the market average by 6%. During the same timeframe, Senate members’ portfolios beat the market average by approximately 10%. These findings and the pressure from 

forced Congress members to re-evaluate their stance on trades using non-public knowledge.

How did Congress respond to investigations into federal insider trading?

Following the studies and investigation, Congress needed to act – and it did. In 2011, Republican Senator Scott Brown (MA) put forward the Congressional Knowledge (STOCK) Act of 2011 to Congress. It wasn’t the first time a bill like this had been introduced, but following the revelations of the previous decade, it garnered far more support than previous bills.

On April 4, 2012, the Office of the Press Secretary sent a press release outlining the STOCK Act and its focus on preventing Congressional trades based on confidential information learned on Capitol Hill. It provided assurances that federal employees aren’t exempt from SEC insider trading laws and put forth additional ethics rules around Congressional insider trading.

Are there consequences for STOCK Act violations?

If we go by the press release indicated above, the stated penalties for instances where Congress members committed corruption offenses, including insider trading on confidential information, would require forfeiture of federal pensions. The STOCK Act added this type of insider trading to the government’s comprehensive federal crimes.

With such comprehensive guidelines within the STOCK Act, you would think that there would be consequences to the violations – but this isn’t exactly accurate. Unfortunately, while the primary goal of the STOCK Act is to provide transparency into this type of insider trading, the clarity around what penalties, if any, exist and who has received such penalties is nearly impossible to find.

What is the future for Congressional trading?

While the STOCK Act has good intentions, it isn’t working as intended. In fact, there have been several instances since its inception where Congress members have used non-public knowledge to continue filling their coffers. The most recent example occurred at the onset of the COVID-19 pandemic.

In January 2020, several Congress members attended a confidential briefing about the virus and afterwards were involved in securities transactions involving companies that manufacture products that would be used during such events. The trades stemming from this non-public information are highly debated and have sparked calls for additional reform.

Several bills have been initiated in Congress seeking to ban members from trading individual stocks altogether. Though they all have a common goal, each has subtle differences, including using a Blind Trust for investment activities. In addition, on April 8, 2022, the 

‘Examining Stock Trading Reforms for Congress’

 hearing took place in the House of Representatives, highlighting all current proposals to limit Congressional stock activities.

The above link lists all current bills and resolutions that seek to clarify Congressional stock market activities, limit their participation or ban Congressional trading completely. These include:

Why is the STOCK Act important for investors?

The online filing requirements of the STOCK Act make it easy for investors to see what Congress members are doing on the stock market. It provides access to a searchable database that offers valuable information investors can use to make data-based judgements on the purchase or sale of securities. This isn’t just theoretical. There have been 

 indicating there’s a link between insider transaction activities and positive stock returns.

Before jumping straight into making decisions based on Congressional stock activities, it’s important to note:

 was designed to provide investors with access to Congressional trading data. Its insight and intuition are invaluable for analyzing securities activities to help make educated buying and selling decisions.

With over two decades’ expertise in insider transaction data, 2iQ, the experienced team behind Capitol Trades, provides cutting-edge data that helps monitor Congressional stock market activity. Its comprehensive data is built on an established and proven process combining next-level automation and manual record collection.

The STOCK Act: What You Need to Know

What is the STOCK Act?

The global semiconductor shortage has led to a paradigm change.

Here are the semiconductor stocks politicians are buying,

Chips for America Act & Stock Market

In Depth

The global semiconductor shortage has caused an enormous amount of disruption over the last two years, with nearly all major electronic goods manufacturers experiencing serious supply chain problems as a consequence of the shortage. Semiconductors lie at the heart of almost all electronic devices today, and the chip crisis has led to global delays for vehicles, smartphones, medical devices, computers, infrastructure equipment, defense equipment, and much more.

As a result of this disruption, many countries are now looking to boost domestic semiconductor manufacturing in order to reduce reliance on other countries such as Taiwan – which manufactures around 90% of the world’s advanced chips. The US,  which has been significantly impacted by the chip shortage, is one such country that is taking steps to bring chip manufacturing home. Since 1990, its global share of chip manufacturing has fallen from nearly 40% to 12%, and government officials want to change this immediately.

Chips Are Crucial to US National Security

, the Center for Strategic & International Studies (CSIS) noted that all major US defense systems and platforms rely on semiconductors. Therefore, the lack of domestic chip production is a real threat to the country's ability to defend itself and its allies.

Compounding the problem is the fact that China has emerged as a major strategic challenger to the US, and is investing heavily in developing its military power. Its goal is to overtake the US and its allies in semiconductor technology. This is a concern for the US government, particularly now that China is looking to reclaim Taiwan. As an independent commission established by Congress recently stated: “

If a potential adversary bests the United States in semiconductors over the long term or suddenly cuts off US access to cutting-edge chips entirely, it could gain the upper hand in every domain of warfare

.” Ultimately, the degree of dependence on Taiwan for leading edge chips is a strategic vulnerability for the US.

Recognising that semiconductors are critical to both the US economy and national security, Congress has enacted the 

CHIPS (Creating Helpful Incentives to Produce Semiconductors) for America Act

, which proposes $52 billion in funding for local players to invest in the domestic chip industry, and has already been approved by the US Senate. Congress is also currently considering legislation called the 

FABS (Facilitating American-Built Semiconductors) Act

, which would establish a semiconductor investment tax credit. The broad goal of these bills is to increase American competitiveness in the semiconductor space by subsidizing new investment in domestic manufacturing capacity.

This potential funding from the US government is likely to benefit a number of companies that operate in the semiconductor industry. With that in mind, we recently took a look at politician trading in the space to see where they have been buying. Here’s a look at the semiconductor stocks that have been bought by US politicians since the start of 2020, ranked by the number of different buyers.

Intel is an American technology company that is headquartered in Santa Clara, California. Founded in 1968, it is the world's largest semiconductor manufacturer by revenue and remains America's largest fab operator. Intel supplies microprocessors for computer manufacturers such as Acer, Lenovo, HP, and Dell. It also manufactures motherboard chipsets, network interface controllers, integrated circuits, flash memory, graphics chips, embedded processors, and other devices related to communications and computing.

Intel looks well positioned to take advantage of any semiconductor manufacturing funding from the US government. As part of an effort to regain its position as a leading maker of semiconductors amid the global chip shortage, it is committing $20 billion to build a manufacturing mega-site in New Albany, Ohio.

Intel says it will build at least two fabrication plants on the 1,000-acre site, where it will research, develop, and manufacture cutting-edge computer chips, and employ at least 3,000 people. However, it has the option to eventually expand to 2,000 acres and up to eight fabs. Construction is set to begin in 2022 and the plant should be operational by 2025, according to the technology company.

Our expectation is that this becomes the largest silicon manufacturing location on the planet

,” said Intel CEO Pat Gelsinger earlier this year. “

We helped to establish the Silicon Valley. Now we’re going to do the Silicon Heartland

Since the start of 2020, 16 US politicians have purchased 

It’s worth noting that Intel has been one of the cheaper semiconductor stocks in recent years. And the stock still appears to offer value relative to the sector. At present, Wall Street analysts expect the semiconductor company to generate earnings per share of $3.47 this year. That puts the stock on a forward-looking price-to-earnings (P/E) ratio of around 11 at the current share price. The low valuation could help to explain why so many US politicians have bought the stock since the beginning of 2020. The average price target among analysts is currently $50, which implies potential upside of a little over 30% at current levels.

Qualcomm is an American multinational corporation that creates semiconductors, software, and services related to wireless technology. Its biggest individual line of business is in systems-on-a-chip (SoCs), which combine central processing with cellular connectivity, and are a vital component in Android smartphones. Over the years, Qualcomm has shifted to selling semiconductor products in a predominantly fabless manufacturing model, using the likes of Samsung and Taiwan Semiconductor Manufacturing Co (TSMC) for manufacturing. 

Qualcomm could potentially benefit from the FABS Act. Introduced in June 2021, FABS would provide a 25% investment tax credit for research and development of advanced semiconductors, which is a major expense for most American semiconductor firms. It is the largest subsidy proposed so far for chip companies that do not operate their own manufacturing plants.

At the same time, it could also potentially benefit from the CHIPS Act, even though it is not involved in manufacturing. That’s because the Department of Commerce views chip design as an essential part of the development process, and plans to support it.

You can't divorce the design side, the innovation side, the research side, from the manufacturing side

," said Deputy Secretary of Commerce Don Graves late last year. "

Once the CHIPS Act gets passed, we'll be very focused on investing to make sure that part of the ecosystem is getting the investment and support that it needs,

Since the start of 2020, 11 US politicians have purchased 

Qualcomm is another cheap semiconductor stock. Currently, analysts expect the group to post earnings of $12.50 for the year ending September 26, 2022. That puts the stock on a forward-looking P/E ratio of 11 currently.

Broadcom Inc. is an American designer, developer, manufacturer, and global supplier of a wide range of semiconductor products. Headquartered in San Jose, California, it creates products for the data center, networking, software, broadband, wireless, and industrial markets.

While Broadcom – which moved back to the US from Singapore in 2018 – outsources the majority of its manufacturing processes, it still has its own manufacturing plants, which are predominantly used for products utilizing its innovative and proprietary processes. In the US, its two main plants are in Fort Collins, Colorado, and Breinigsville, Pennsylvania. This means that the company could be in line to receive funding from the CHIPS Act if it makes further investments in its plants.

Texas Instruments is an American technology company that designs and manufactures semiconductors and various integrated circuits, which it sells to electronics designers and manufacturers globally. Headquartered in Dallas, Texas, it is one of the top 10 semiconductor companies worldwide based on sales volume.

Texas Instruments previously operated five fabs in Texas, along with one in Maine. However, in 2020, it announced that it would be closing two of the Texas fabs – which were both more than 50 years old – and building a new 300mm wafer fab at its Richardson, Texas facility. This is expected to start production in the second half of 2022.

More recently, Texas Instruments announced that it would begin construction on new 300mm semiconductor wafer fabrication plants in Sherman, Texas, this year. This site has the potential for up to four fabs to meet demand over time. According to the company, total investment potential at the site could reach approximately $30 billion and support 3,000 direct jobs over time. Given these plans, Texas Instruments looks well positioned to receive government funding.

Since the start of 2020, eight US politicians have purchased 

KLA Corporation is a supplier of process control and yield management solutions and services for the semiconductor industry. Based in Milpitas, California, the company offers a range of advanced inspection tools, metrology systems, and computational analytics software designed to improve manufacturing yields for a variety of standard and specialty semiconductors.

KLA could play a major role in the build out of US chip manufacturing plants as it is a leader in process control equipment – which scans wafers and semiconductors for imperfections. Its equipment, which is used by the likes of Intel, Samsung, and TSMC, is absolutely crucial to leading-edge semiconductor production. It’s worth noting here that TSMC is currently building a new $12 billion manufacturing plant in Arizona while Samsung plans to build a $17 billion plant in Texas by 2024.

It’s also worth noting that in a recent research note, analysts at Bank of America named KLA as one of the companies that is likely to benefit the most from the move to bring chip manufacturing back to the US. In the note, analyst Vivek Arya wrote that KLA has a "unique position as a key enabler of semiconductor manufacturing technology" and that the stock is set to benefit from the shift to domestic production.

Applied Materials is an American company that supplies equipment, services and software for the manufacture of semiconductors. The company is headquartered in Santa Clara, California.

Like KLA, Applied Materials could play a key role in the reshoring of chip manufacturing. Applied is the largest maker of tools for making semiconductors, and its engineering solutions are used to create virtually every new chip globally. Its customers include Samsung, Intel, and TSMC. With all of these companies looking to build new manufacturing plants in the US, demand for Applied Materials’ solutions should be high.

This stock, like Intel and Qualcomm, is also in the value camp. At present, analysts expect Applied Materials to generate earnings of $7.83 for the year ending October 31, 2022. That puts the forward-looking P/E ratio here at 11.7.

Politician Buying in Semiconductor Stocks

In conclusion, our analysis of US politician buying in the semiconductor sector reveals some interesting insights. Not only have politicians bought shares in chip manufacturers such as Intel and Texas Instruments – which would almost certainly be beneficiaries of any potential government funding – but they have also invested in chip designers such as Qualcomm and Broadcom and companies that make semiconductor manufacturing equipment such as Applied Materials and KLA. Meanwhile, politicians have also gravitated towards value stocks in the semiconductor space, with Intel – one of the cheapest stocks in the semiconductor sector – getting the most interest from these individuals. 

Ro Khanna is a frequent trader who generally doesn’t invest for the long term

The CHIPS Act: Here Are the Semiconductor Stocks Politicians Are Buying

The CHIPS for America Act: Here Are the Semiconductor Stocks Politicians Are Buying

The Secrets Behind Nancy Pelosi’s Market-Beating Trading Strategy

Nancy Pelosi has made a number of profitable trades in recent years and beaten the market

Nancy Pelosi has made a number of profitable trades in recent years and beaten the market by a wide margin. Here, we take a closer look at her trading strategy. 

US House of Representatives Speaker Nancy Pelosi has gained considerable attention in the investment world over the last few years and it’s easy to see why. Together with her husband Paul – who owns and runs a San Francisco-based venture capital firm and is responsible for all her filings under the 

 – she has made a number of very profitable trades, and beaten the market by a wide margin.

Recently, we took a closer look at Pelosi’s trading strategy using data from Capitol Trades. Our aim was to get a better understanding of the stocks she trades and the financial instruments she uses in her strategy. Here are some key takeaways from our analysis.

Pelosi Trades Long Call Options to Magnify Her Returns

The first thing that stands out about Pelosi’s trading strategy is that there is a heavy use of options. More specifically, Pelosi likes to use call options, which provide the option buyer with the right to buy shares at the strike price if it is beneficial to do so.

Now, Pelosi appears to have two main strategies when it comes to trading call options. The first is a straightforward strategy that involves buying long in-the-money (ITM) call options that have a strike price that’s lower than the current stock price. If the call option is successful, Pelosi exercises the contract and takes ownership of the shares.

This strategy – which can generate high returns if successful – has certainly helped Pelosi beat the market in recent years. Consider a trade her spouse Paul made in February 2020, for example. Here, she bought 

 with a strike price of $130 and an expiry date of March 19, 2021, for a price of around $60. At the time, Microsoft stock was trading near $184. On the expiry date of March 19, 2021, Microsoft shares were trading near $230, which means that, when she 

, her gain from the trade would have been somewhere around 60-70%. By contrast, an owner of regular MSFT shares would have made a gain of just 25% over the same time horizon.

The other main strategy involving call options that Pelosi employs is a covered calls strategy. This involves selling a call option while owning the underlying stock in order to generate income. Traders typically use this strategy when they only expect a minor increase or decrease in the underlying stock price for the life of the option. If the stock does not hit the option’s strike price, the seller of the call option gets to keep the premium.

An example of this is a trade her spouse made on January 16, 2020. Here, Pelosi sold between $500,000 and $1 million in Amazon call options. These had an expiry date of January 17, 2020. On the same day, Pelosi 

It’s worth noting here that Pelosi does also buy stocks. For example, on January 27, 2022, her spouse purchased 

10,000 shares in AllianceBernstein Holding LP

 at a price of $46.21 per share. However, a lot of her trading is based around call options.

A second observation from our analysis of Pelosi’s trading strategy is that she tends to focus on just a handful of sectors.

Our data – which goes back to November 2013 – shows that the sector she trades the most is Information Technology. This sector has the highest trading volume and transaction count by a significant margin. However, she is also active in the Communication Services, Consumer Discretionary, and Financials sectors.

This sector focus is illustrated in the charts below, which show her transaction count by sector and transaction volume by sector respectively.

Finally, zooming in on her trades, we can see that a lot of her trading activity is based around the mega-cap tech stocks. Since November 2013, for example, her top four stocks traded, by trading volume, have been:

However, she is also not afraid to trade other tech stocks. Since June 2020, for example, she had made:

Nancy Pelosi’s Latest Stock Market Trades

As for her latest activity, here’s a look at the trades Pelosi has made in the last three months.

In summary, Nancy Pelosi has a unique trading strategy that is quite different from the average investor’s strategy. While most investors buy stocks and diversify their portfolios by allocating capital across a range of sectors, Pelosi frequently uses call options and focuses heavily on the technology sector.

Going forward, there’s no guarantee that Pelosi’s strategy will continue to be so successful. In 2022, the technology sector has underperformed. However, given her track record in recent years, her trades are worth keeping an eye on.

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