Nancy Pelosi, D-Calif., has several major accomplishments on her resume. She has been a United States Representative for almost 37 years. She is the first female Speaker of the House of Representatives and the first woman to lead either chamber of Congress. Is she also a market-beating investor?
The former Speaker of the House almost tripled the S&P500‘s returns in 2023, giving it the ninth best performer among members of Congress, according to options trading platform operator Unusual Whales. However, all of Pelosi’s transaction disclosures indicated that her husband, Paul Pelosi, was the owner.
Pelosi’s Recent Purchases
Over the past 12 months, Pelosi has only purchased two stocks. Both are also favorites of many other investors.
On June 15, 2023, the husband of the former President served 50 purchase options buy 5,000 shares of Apple (NASDAQ:AAPL) for $80 per share. Apple’s current stock price is more than double that purchase price.
Mr. Pelosi has owned Apple stock for years. Other members of Congress or their families have also invested in the tech giant. Apple was second on the list of stocks that lawmakers bought the most in 2023.
On the same day of the Apple transaction, Pelosi also exercised 50 call options to purchase 5,000 shares of Microsoft (NASDAQ:MSFT) for $180 per share. As with Apple, Microsoft’s current stock price is more than twice the strike price of these options.
More options
The first lucrative call option purchases for Apple and Microsoft were made in 2022. Paul Pelosi has purchased more call options on other stocks in recent months.
On December 22, 2023, Mr. Pelosi purchased 50 call options for Nvidia (NASDAQ:NVDA) with a strike price of $120 and an expiration date of December 20, 2024. At the time, Nvidia’s stock price was around $488.
On February 12, 2024, Pelosi purchased 50 call options for Palo Alto Networks (NASDAQ:PANW) with a strike price of $200 and an expiration date of January 17, 2025. Palo Alto Networks’ stock price was then hovering around $372.
A few days later, on February 21, 2024, the former President’s husband purchased 20 additional call options for Palo Alto Networks. Again, the strike price was $200 with an expiration date of January 17, 2025. The stock had fallen significantly, however, to around $262.
Call options with a strike price lower than the current stock price are called “in-the-money” options. Purchasing in-the-money call options reduces investors’ upfront costs and limits the risk of loss while allowing them to profit from upward movements in the underlying security.
Are Pelosi’s choices good choices now?
Valuation is a concern for all four stocks Pelosi likes. Apple’s sluggish growth may not justify its forward price-to-earnings ratio of nearly 26. Microsoft and Nvidia trade at well above 30 times forward earnings, while Palo Alto Networks’ forward earnings multiple reached a dizzying high of 47.
However, Apple, Microsoft and Nvidia are expected to benefit from the generative AI boom in the years to come. The need for cybersecurity solutions is expected to grow, spurring Microsoft and Palo Alto…
