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Insider move? US Politicians buy defense stocks ahead of $95B aid package

Insider move? US Politicians buy defense stocks ahead of $95B aid package

After a protracted deadlock, the U.S. House of Representatives passed a massive military-focused foreign aid bill on Saturday, April 20.

The bill – in total, worth $95 billion and on its own bigger than the annual defense budgets of every country save for the U.S., China, and Russia – has three main beneficiaries: Israel, Ukraine, and Taiwan.

It mostly focuses on replenishing and modernizing equipment and, in some cases, supporting humanitarian aid and salary payments.

Along with the recipient countries, the U.S. defense industry and its main corporations – Lockheed Martin (NYSE: LMT), Raytheon (NYSE: RTX), Boeing (NYSE: BA), and Northrop Grumman (NYSE: NOC) – are also sure to benefit as much of the funds will go toward procuring and maintaining their products.

By extension, the shareholders of these four firms are also likely to be major beneficiaries and few are as prominent as a number of U.S. politicians.

U.S. politicians buy up war stocks as global tensions mount

As pointed out by Quiver Quantitative, a platform offering a string of investment strategies but best known for sharing dubious trades made by public figures, numerous politicians have been making substantial investments in the defense industry for well over a year. 

Indeed, elected officials have already proven exceptionally active around – and frequently shortly before – significant armed actions, as exemplified by their trades just before the October 7 attacks.

In an X post from April 20, Quiver Quantitative singled out 4 trades in particular.

In October, Representative Josh Gottheimer disclosed an NOC investment that has, since it was made on September 26, 2023, risen 8.44% by the premarket on April 22, 2024.

An October 23 acquisition of RTX shares by Markwayne Mullin has grown 38.88% since.

Similarly, Representative McCaul and his wife started purchasing the stock of a defense contractor called Oshkosh shortly after meeting with President Zelensky last February and their trades have risen approximately 56% by April 2022.

Finally, last summer, Representative Kevin Hern acquired shares of both LMT and RTX last summer, though, in a surprising twist, both stocks are near the same price at the time of publication as at the time of purchase.

Along with the four examples provided in the X post, there have been more recent – frequently suspiciously timed investments made by U.S. investors, and not all of them are directly related to the defense industry.

One of the most tracked such trades has been Representative Nancy Pelosi’s bet on Palo Alto Networks (NASDAQ: PANW), which was made near the time when a significant national security risk was disclosed to Congress. 

The trade is also notable as it is, uncharacteristically for one of the most prolific congressional traders, deep in the red by press time.

More recently, Representative Hern disclosed a string of additional purchases of Lockheed Martin shares, but also of a string of energy companies – a curious move given that it came shortly before Israel and Iran came to the brink of open warfare.

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