While discussions of politics typically arouses intense anger these days, they might also lead to excellent investment ideas, which is why interest in stocks Republican Congressmen are buying picked up in recent weeks. Carrying a general reputation for smaller government and supporting free market enterprises, Republicans theoretically should be good stock pickers.
Now, to be clear, the concept that lawmakers represent astute investment market participants stands on shaky ground. Nevertheless, it’s also reasonable to assume that they tend to enjoy access to greater resources and speedier information. For instance, a few U.S. senators dumped their equities before the coronavirus crash. Therefore, the below stocks Republican Congressmen are buying may be of interest to discerning investors.
One disclaimer: while I use the search-friendly term, “stocks Republican Congressmen are buying,” you should be aware of course that many women serve in Congress. However, suggesting a name change to the gender-neutral term Congresspeople might be considered “woke.” So, in case you’re curious, I’m merely staying on brand.
|NYCB||New York Community Bancorp||$8.74|
First up on the list for stocks Republican Congressmen are buying now is creatives-oriented software giant Adobe (NASDAQ:ADBE). According to Capitol Trades, House Republican Diana Harshbarger of Tennessee acquired shares of ADBE on Jan. 25, 2023. Not quite your typical go-to as a conservative’s stock, Adobe may find increased demand due to the burgeoning gig economy.
Overall from a financial perspective, ADBE represents a solid idea. For one thing, Adobe features an Altman Z-Score of 11.54, indicating extremely low risk of bankruptcy in the next two years. Operationally, the company enjoys a three-year revenue growth rate of 18.1%, above 72.77% of sector peers. On the profitability front, Adobe’s net margin on a trailing-year basis comes out to 26.32%. This stat beats out 95% of its competitors.
Finally, Wall Street analysts agree with Harshbarger’s purchase, rating it a consensus moderate buy. However, with an average price target of $393.55 implying 2% upside potential, the rewards appear limited.
New York Community Bancorp (NYCB)
Another entry for stocks Republican Congressmen are buying piqued my interest and that’s New York Community Bancorp (NYSE:NYCB). You’d think that after the Covid-19 fiasco, Congresspeople would rather flee from danger. Not House Republican Nicole Malliotakis of New York. She bid up the threat, buying NYCB on March 17. That’s almost right at the bottom. Kudos to her for her audacious trade.
As well, I’ve got to give credit where it’s due. She didn’t flee from America, she bet on America, which represents the messaging Republicans will undoubtedly deploy next year. As for NYCB itself, it’s kinda shaky if I’m being honest. For instance, the financial firm features a cash-to-debt ratio of 0.1, ranking worse than 93.19% of the field.
Still, it features strong long-term revenue growth. As well, it’s undervalued. Currently, the market prices shares at a trailing multiple of 7.23. As a discount to earnings, NYCB ranks better than 64.11% of its rivals. Lastly, analysts endorse her investment, pegging NYCB as a consensus strong buy. Also, their average price target stands at $10.89, implying over 20% upside potential.
A polarizing figure even among conservatives, Republican Senator Mitch McConnell of Kentucky garners a reputation for frustrating both sides of the aisle. However, he might be an astute securities trader. On Nov. 29, 2022, McConnell purchased shares of Kroger (NYSE:KR). A supermarket giant, McConnell probably figures that inflationary pressures will lead to more spending among households for critical resources.
He’s not wrong. Probably one of the cynical and simultaneously sensible stocks Republican Congressmen are buying, KR gained nearly 13% of equity value in the past six months. Since the Jan. opener, it’s up 11%. Along with compelling fundamentals, Kroger benefits from solid operational strengths. For example, its three-year revenue growth rate is 10.3%, above 74.73% of the competition.
Also, the market prices KR at a forward multiple of 11.04. As a discount to projected earnings, Kroger ranks better than 81.25% of the field. In closing, analysts peg KR as a consensus hold. Their average price target is $51.62, implying almost 5% upside potential.
Clear Secure (YOU)
Moving onto the more typical ideas for stocks Republican Congressmen are buying, House Republican David Kustoff of Tennessee acquired shares of Clear Secure (NYSE:YOU) on March 2, 2023. A technology firm specializing in biometric travel document verification services, Clear Secure essentially enables frequent-flyer members to skip long lines at security checkpoints. With conservatives touting law and order, YOU makes plenty of sense from that perspective.
Financially, it’s a mixed bag if I’m being blunt. In fairness, the company enjoys relatively decent stability in the balance sheet. Its Altman Z-Score is 3.03, which ranks as basically not great, not terrible. Operationally, the enterprise commands a three-year revenue growth rate of 17.2%, above 71.31% of its peers. However, it’s not a consistently profitable business. Glaringly, its operating and net margins sit below breakeven. That said, Wall Street analysts peg YOU as a consensus moderate buy. Moreover, their average price target stands at $37, implying more than 41% upside potential.
If you want to have a discussion about stocks Republican Congressmen are buying, hydrocarbon specialists like ConocoPhillips (NYSE:COP) will invariably pop up. With the GOP generally supporting a “drill, baby, drill” mentality, you can expect conservatives to boost COP. Here, House Republican Michael McCaul of Texas bought up COP shares on Feb. 13, 2023.
So far, ConocoPhillips shares haven’t performed that well. Since the January opener, they dipped more than 12%. At the same time, rising social normalization trends combined with inflationary pressures may bolster the oil giant. For the time being, investors can take solace in its solid balance sheet and outstanding growth metrics.
As well, ConocoPhillips enjoys a net margin of 23.8%, beating out 77.28% of its peers. Further, its price-earnings-growth (PEG) ratio is 0.27 times, favorably below the sector median of 0.74 times. In closing, covering analysts peg COP as a consensus strong buy. Their average price target stands at $136.31, implying over 37% upside potential.
Alliance Resource Partners (ARLP)
Based in Tulsa, Oklahoma, Alliance Resource Partners (NASDAQ:ARLP) is a diversified natural resource company that generates operating and royalty income from the production and marketing of coal to major domestic and international utilities and industrial users. If you think that’s a shoo-in for stocks Republican Congressmen are buying, you’re absolutely correct.
On Feb. 15, 2023, House Republican Virginia Foxx bought shares of ARLP. Unfortunately for her, the investment hasn’t performed well so far. In the trailing six months, ARLP lost about 15% of equity value. Nevertheless, resource supply constraints due to geopolitical flashpoints may cynically lift Alliance Resource Partners.
Regarding the financials, the company presents a decent mix of stability and certain positive operational stats. Perhaps most enticingly, the market prices shares at a forward multiple of 3.31, which rates as significantly undervalued. Finally, covering analysts peg ARLP as a consensus moderate buy. Their average price target stands at $30, implying nearly 49% upside potential.
Finally, for the most Republican of stocks Republican Congressmen are buying, Chevron (NYSE:CVX) is a beacon of conservative values. Basically, it’s American, masculine and American. Fueled by hydrocarbons and possibly liberal tears, Chevron in all seriousness represents a critical cog in U.S. infrastructure. Here, Republican Senator Shelley Moore Capito of the proudly red West Virginia bought up CVX on Feb. 6, 2023.
Unfortunately, CVX and many other energy plays find themselves struggling for traction. Since the January opener, CVX lost 6% of equity value. However, in the long run, Chevron’s well positioned for growth. It features a stable balance sheet and a three-year revenue growth rate of 18.1%. This stat outpaces 71.04% of peers in the oil and gas industry.
Also, it’s a highly profitable enterprise. In the trailing year, the company posts a net margin of 15.05%, better than 68.46% of its rivals. Lastly, analysts peg CVX as a consensus moderate buy. Further, their average price target stands at $188.75, implying almost 16% upside potential.
On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.