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This suspicious congressional trade returned 48% in two months

This suspicious congressional trade returned 48% in two months

Reports of various elected U.S. officials making significant, conveniently timed trades are not, unfortunately, rare. While much focus has been given to Nancy Pelosi and her husband – and indeed, their trading strategy has so far proven successful, as made evident by the returns of a trading bot that copies their investments – Senator Tina Smith has been increasingly in the news in the final months of 2023.

In November, Senator Smith bought $250,000 worth of shares of a small-cap healthcare company called Tactile Systems Technology (NASDAQ: TCDM). At the time, the investment was described as “the most suspicious congressional stock trade in months” in an X post by Quiver Quantitative.

Not only does Senator Smith sit on the Senate Committees on Health, but the firm is also based in her home state of Minnesota and received government contracts worth millions of dollars despite its relatively small size. Finally, the trade itself was very well-timed as it came as TCDM ended a significant stock market drop.

Since Senator Tina Smith made the investment – in just over two months – the stock is up by a significant 48%, according to Quiver Quantitative.

Odd congressional trades drive support for a trading ban

Much like Tactile Systems is not the only lucrative trade recently made by Smith – the Senator made a similarly successful investment in Artivion (NYSE: AORT) around the same time – she is far from the only official to have proven an uncanny ability to predict market moves.

The trend, increasingly discussed online, has driven support for new legislation preventing representatives from directing their investments. Interestingly, the “Ban Congressional Stock Trading Act,” a bill that would force officials to either divest or place their assets in blind trusts, has enjoyed bipartisan support for multiple years, but a vote has been repeatedly promised and postponed.

TCMD price analysis

Another point making Senator Smith’s trade suspicious is that TCDM is, at the time of publication, far from its yearly highs. It has been on a decisive decline throughout much of the autumn and has started climbing again only after the Senator made her investment. 

On November 8 – the date the trade was made – TCDM stock was worth approximately $10 and had risen to $14.73 by the market’s close on November 26. In the last 30 days, the shares are up 4.99% and in the latest 24 hours of trading, they are 2.65% in the green. TCMD stock has, however, been declining in the Wednesday pre-market.

TCMD 1-day price chart. Source: Google

Looking at the entire year, TCDM stock was trading at its highest in June and July – slightly above $25 – and is, despite the autumn decline, 24.30% in the green since January 1.

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