Seven Lakes Weekly Summary

Rep. McCaul loosing money as Paycom sinks -35%

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Seven Lakes Research
November 07, 2023

Hello Seven Lakers,

below a summary of relevant events happened in the stock market in the last week

📈 1/ Stocks and sectors bought by US politicians last week

This week, the trading activity at Capitol Hill was quite limited, with ~70 transactions taking place

Semiconductors & Capital Markets were the most invested sectors

If you want to receive daily updates on politicians trades, click here

🏦 2/ US Politicians potential insider trading: Senator Mullin is profiting from defense stocks

  • Senator Markwayne Mullin transitioned from the House of Representatives to the Senate in January 2023.

  • He has been appointed to the Senate Armed Services Committee, among other committees.

  • Mullin has made two trade disclosures this year, revealing defense purchases

  • On October 3, he made a significant purchase of Raytheon Technologies Corp (RTX: US) stock from a joint account, investing up to $15,000 in RTX shares

  • Since Mullin's purchase, RTX stock has increased by +16.39%.

  • Despite an almost 19% year-to-date decline, RTX stock has been performing well recently, driven by the Middle East war escalation and beating consensus with its Q3 earnings.

If you want to receive daily updates on political trading, click here 

🔔 3/ How to be notified when politicians buy / sell stocks

As seen before, some suspicious trades were made by Congress Members and their relatives

However, the GOOD NEWS is that their moves can be copied (politicians need to disclose their stock positions)

The Seven Lakes Research analyst team provides PREMIUM detailed updates from Monday to Friday with all the relevant fact on: 

Click on the button below to start receiving them 👇👇👇👇👇

📄 4/ Interesting stock market stories

STORY #1: Meta faces legal action over child welfare concerns

An update on Meta

  • Meta Platforms Inc. is a multinational technology conglomerate founded in 2004, headquartered in California, with a presence in over 150 countries and listed on the Nasdaq stock exchange. It has a market capitalization exceeding $801 billion.

What happened

  • A lawsuit has been filed against Meta, the parent company of Facebook and Instagram, by a bipartisan group of 42 U.S. attorney generals.

  • The lawsuit alleges that Facebook and Instagram's algorithms and endless scrolling features harm the cognitive well-being of young users, particularly children and teenagers.

Why is this important

  • Privacy concerns are raised as data is collected from children under the age of 13 without parental consent, potentially violating the Children's Online Privacy Protection Act (COPPA).

  • The attorney general of Washington, DC, accuses Meta of promoting addictive products that encourage young individuals to spend excessive time on screens.

  • Meta responded by expressing a shared commitment to providing safe online experiences for teens and families and highlighting the introduction of over 30 tools to support them.

Political trading

  • In a separate context, Senator Markwayne Mullin invested up to $15,000 in Meta stock on October 3, 2023, when the shares were priced at $300.94 per share

  • If you want to be notified when politicians trade stock, we send daily email alerts here 

STORY #2: Rep. McCaul loosing money as Paycom sinks -35%

The news

  • Paycom Software (PAYC:US) shares experienced a significant -35% decline due to a downward revision of the company's full-year forecast

McCaul’s portfolio

  • This resulted in substantial losses for Congressman Michael McCaul, who aggressively bought the stock back in August when it was trading just below the $300 mark

  • PAYC shares are now trading around $160 following the recent selloff, reflecting significant losses for Congressman McCaul

  • If you want to be notified when politicians trade stock, we send daily email alerts here 

Why is this happening?

  • Multiple brokerages downgraded their rating on the stock after the quarterly earnings update

  • Main reason for downgrade:

    • Guidance cut

    • Revenue deceleration: growth of 10%+ vs. 25%+ previously

    • Potential operational changes that need to be made to protect margins

STORY #3: Amazon +6% after positive earnings

What happened

  • Amazon (AMZN:US) stock opened over +6% higher following its impressive third-quarter results, which exceeded analyst expectations

Reasons

  • Amazon CEO, Andy Jassy, cited strong performance in the Stores business, stable AWS growth, robust Advertising revenue, increased operating income, and significant free cash flow

Detailed numbers

  • Earnings per share surpassed expectations at $0.94, while revenue reached $143.1 billion, outperforming the anticipated $141.4 billion

  • Amazon Web Services (AWS) generated $23.1 billion in revenue, slightly below the expected $23.2 billion, while Advertising revenue reached $12.1 billion, surpassing the expected $11.6 billion

  • Amazon provided guidance for the fourth quarter, with an expected sales range of $160 billion to $167 billion, slightly above analysts' expectations

  • The third-quarter revenue marked a 13% increase, indicating a performance acceleration following economic challenges in 2022

Politicians buying the stock

  • Senator Markwayne Mullin bought $50,000 - $100,000 worth of Amazon shares on September 13, but the stock price dropped to below $130 per share on Friday

  • If you want to be notified when politicians trade stock, we send daily email alerts here 

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