Market Commentary

McCaul Proved to Have a Lucky Hand With His Shell Investment

Oliver Reiche · 1 minute read

Republican Michael McCaul who serves on the Committees on both the House Foreign Affairs Committee and the House of Homeland Security, disclosed recently that he added more shares of British oil giant Shell PLC (SHEL:US) to his Portfolio.

On October 21, 2022, Congressman McCaul bought Shell shares in two transactions in the price range of $50,000 - $100,000, each for a price of $52.99.

On October 27, 2022, approximately a week later, the energy company reported blow-out earnings. Profits doubled and cash flow remained strong, coming along with an announcement to raise its dividend per share by 15% for the fourth quarter. The company also announced a new share buyback program, which is set to result in an additional $4 billion of distributions and is expected to be completed by its next earnings release. Due to the tensions in Ukraine followed by a shift in EU energy politics, the company is benefitting from surging commodity prices and LNG supplies.

One and half months prior to the earnings report, Congressman McCaul started to initiate a position in SHEL with two transactions on September 8, 2022. These trades were worth between $100,000 and $250,000 when the market closed at $52.16. He accumulated more shares through four more transactions by the end of September 2022, valued in the price range of $100,000 to $250,000. At this time, Shell’s stock price closed at $46.80 and $48.07 respectively.

In other words, by the time of the earnings release, he was already buying the dips. As a result, his Shell position should be up by more than 10%.

An influential member of the Republican party, Mr. McCaul’s trades are closely watched given his influence on other lawmakers and overall popularity.