American elected officials are well-known as successful stock traders to the extent that some, like Jordan Belfort, the “Wolf of Wall Street,” believe they are continuously breaking the law and engaging in insider trading.
Generally, many politicians decisively beat the major stock market indices like the S&P 500 and all major hedge funds, with Representative Brian Higgins achieving a staggering return rate of 238.9% on his investment portfolio in 2023 alone.
While Higgins was the most successful by far, and Nancy Pelosi – another veritable trading prodigy – is the most famous, there is no shortage of stock market success stories among elected officials – including outside Congress.
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Indeed, in November 2023, Senator Tina Smith made a stock purchase that has been labeled as ‘the most suspicious congressional stock trade in months’ and has raked in significant returns since.
Senator Smith’s trade
On November 8, 2023, Senator Tina Smith of Minnesota – a member of the Senate Committee on Health – invested $250,000 in a healthcare company called Tactile Systems Technology (NASDAQ: TCDM).
The trade was reported on November 21, 2023, and was labeled as highly suspicious by Quiver Quantitative in an X post due to a variety of factors. Not only is TCDM a healthcare stock – and Senator Smith sits on the Committee on Health – but is also based in Minnesota and received a string of significant government contracts from the state.
The existence of the contract and the trade were made even more suspicious by the fact that Tactile Systems is – based on government contract and congressional investment standards – an extremely small cap at only approximately $500 million at the time of purchase.
A Senator’s annual salary in three months
No matter what drove Senator Smith to invest in Tactile Systems, the purchase has proven highly lucrative. When she acquired the stock on November 8, it was worth approximately $10. On January 30, the healthcare company opened slightly above $15, meaning that in three months, Smith returned 50% on her investment and made approximately $125,000 – almost an entire senatorial annual salary, which averages $174,000.
By press time in the pre-market on Wednesday, January 31, TCDM declined slightly to $14.85 as it fell by 1.72% during Tuesday trading. The company continued its fall in the extended hours and is 3.30% in the red before the market’s open.
Zooming out somewhat, Tactile Systems have been rising since 2024 started, and the firm is up 4.28% year-to-date. Overall, the same is true for the last 52 weeks as the healthcare stock is 14.49% in the green in the timeframe.
Indeed, while the firm experienced a downturn in the third quarter of 2023, it is hard to neglect that Senator Smith’s trade coincided with its 52-week lows and that the trend was reversed shortly after the purchase.
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