With the rise of global tensions amid broader instability in the Middle East, which threatens to escalate further, investors are looking at the defensive sector and its stocks, as they are one of the rare industries set to benefit from conflict.
This is precisely what the U.S. politicians have been doing, as Raytheon Technologies (NASDAQ: RTX) proved to be a favorite pick in 2024 of many Congress, Senate, and House members, many of which sit on defence committees and boards.
This trend started in the first half of 2023 and has continued since then. During this period, many U.S. politicians bought RTX stock, with several representatives buying RTX shares on multiple occasions.
RTX stock purchases outweigh sales by a significant margin
In a trend that goes against the current broader insider activity on the stock market, which heavily favors selling, RTX stock has had more purchases than sales by U.S. politicians in the previous year.
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According to Quiver Quantitative data, U.S. politicians bought RTX shares on eight occasions and sold them on four occasions in the previous year.
Among these, the most active has been Republican House member Kevin Hern, who bought RTS stock in six separate trades, investing $15,000 each time, with the most recent trade taking place on July 15.
Bill to stop defence stock purchases by politicians in limbo
On February 6, Democratic Representative Rashida Tlaib introduced legislation banning members of Congress, their spouses, and dependent children from holding or trading stocks in companies with contracts or other business dealings with the Department of Defense.
Under current law, members of Congress and their families are permitted to invest in securities, including stocks of companies they oversee, provided they disclose their holdings annually and report any transactions within 45 days.
This has raised concerns about potential conflicts of interest, particularly in the defence sector. Companies like Lockheed Martin (NYSE: LMT) and Raytheon, which rely heavily on government contracts funded by congressional appropriations, may create especially significant conflicts for lawmakers allowed to invest in these industries.
The bill introduced in February is still waiting for a vote from House members as of this date.
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