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U.S Senator gains 40% in three weeks since suspicious stock trade

U.S Senator gains 40% in three weeks since suspicious stock trade

Numerous lucrative and oftentimes strange investments made by various U.S. members of U.S. Congress and Senate have lately been at the center of increased public scrutiny. Perhaps most notably, the discussion has led to the introduction of  the ‘Ban Congressional Stock Trading Act.’

The act aims to prevent representatives, their spouses, and dependant children from directly engaging with the stock market and to either divest or place their shares into a blind trust. While the legislation is yet to be passed, numerous individuals and organizations have taken it upon themselves to track strange trades made by elected officials.

One such trade was made on November 8 when Senator Tina Smith, a member of the  Committee on Health, invested $250,000 in a small company called Tactile System (NASDAQ: TCDM). Over the following weeks, the trade only became more interesting as the firm’s shares entered into a significant rise, making it one of the more successful investments in a company that was, at that time, under $10.

Senator Smith’s Trade

Tactile System is a healthcare stock based in Senator Smith’s home state of Minnesota that makes devices for treating venous ulcers, lymphedema, and chronic swelling. TCDM’s market capitalization was relatively small and stood at $329.671 million at the time of writing, 

Since the Senator made the investment, Tactile Smith has experienced a significant rise and is approximately 43% in the green, as pointed out by Quiver Quantitative, an X user known for tracking suspicious trades conducted by U.S. elected officials.

Apart from TCDM’s significant rise since the investment and the timing of the investment itself – just after the stock price dropped suddenly from more than $12 to about $10 = it is interesting to note that the company has received millions of dollars in government contracts, despite its relatively small size.

TCDM 1-month price chart. Source: Google

TCDM price analysis

While the timing and size of the investment are interesting, as well as TCDM’s performance, it is important to note that the stock has a history of volatility. It started the year just above $11, rose significantly during the summer, and entered into a decline in September. 

TCDM YTD price chart. Source: Google

Additionally, while the trade is suspicious, its timing also aligns with a broader rally in the U.S. stock market. TCDM is worth $14.03 at the time of publication. It rose 0.29% in the last 24 hours, 21.47% in the last 5 days, but is down 31.53% in the last six months, and is overall up 18.40% since January 1.

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