To The Moon

$Amazon.com(AMZN)$ $Alphabet(GOOG)$ $AbbVie(ABBV)$

In 2024, members of Congress significantly outperformed the stock market, with many achieving triple-digit returns. The majority, if not all, of them exceeded market averages by a large margin, and this trend was consistent in 2023 as well. In fact, some members saw returns as high as 239%, while the S&P 500 only grew by 24.8%. Even in 2022, when the S&P posted a negative return of about 18%, Congress members still managed to outperform by a substantial margin.

This pattern has continued, with Nancy Pelosi’s husband making $38 million in stock market gains just weeks leading up to Donald Trump’s inauguration. Looking ahead to 2025, one intriguing question is whether Congress will impose restrictions to prevent members from gaining an unfair advantage over regular investors under Trump’s leadership.

Amazon

Today’s, we focus on the recent stock purchases made by Congress members, highlighting some of the top stocks they’ve been buying. We'll break down eight stocks that have caught the attention of multiple lawmakers, starting with Amazon, which many members, including Nancy Pelosi, have been buying. Despite trading near its 52-week high, Amazon has seen a nearly 50% increase in the past year and a massive 1,226% return over the last decade. Analysts, including those from Seeking Alpha and Wall Street, have rated Amazon as a strong buy.

When we assess Amazon's growth potential, the company receives an A- grade for year-on-year revenue growth of 12%, which is significantly higher than the sector's average of 2.3%. However, it falls short of its five-year average of 20%. Amazon’s earnings per share are expected to grow by 22%, much higher than the sector's 10.2% growth. Analysts are optimistic about Amazon’s ability to meet these expectations, as the company has consistently exceeded market projections.

Looking at Amazon's valuation, the DCF model gives an intrinsic value of $253, representing a 46% upside from the current price. If we use more aggressive growth rates, the potential upside increases to 96%, with a valuation of $459. However, for a more conservative estimate, we’re using a 20% growth rate, which suggests a price target of $227, offering a modest 5-10% upside in the near term.

Alphabet

We also examine Alphabet, another stock that has attracted significant interest from Congress members. Like Amazon, it has outperformed the S&P 500 over the last decade, with a return of 641%. Although Alphabet is at or near its 52-week high, it continues to receive strong buy ratings from analysts, including Seeking Alpha and Wall Street. Despite a modest 4% dividend yield, Alphabet's growth potential remains strong, with expected double-digit growth in the coming years.

Stay tuned as we dive deeper into other stocks that Congress members are buying and consider whether following their lead could help you achieve similar market outperformance.

Similar to Amazon, the revenue growth for these companies is lower than their 5-year averages. However, their earnings per share (EPS) is expected to grow by 17%, significantly outpacing the sector’s 11.6%, though it's close to their 5-year average of 19.1%. As we mentioned earlier, the green indicators across various metrics are very positive. Looking ahead to December 2025, EPS is anticipated to be just under $9, which gives the stock a forward P/E ratio of 22.3. This makes it the most affordable among the “Magnificent 7” from a valuation standpoint.

When we apply our intrinsic value models, we arrive at a price of $215. This is based on a conservative 12% growth rate, which is lower than the recent year’s performance. You can expect an 8% upside with this rate. If we factor in a margin of safety (MOS) of 10%, the price target would be around $194. This is similar to Amazon’s valuation, with both stocks showing a modest 5-10% MOS. Wall Street analysts have a target of $225, which suggests an 18% upside by the end of the year.

Abbvie

The next stock we’ll look at is ABBV, which has increased by only 4% over the last year. Over the past decade, it has seen an 181% return, which is more or less in line with the S&P's performance. The stock is trading at the low end of its 52-week range, but it has a solid 3.85% dividend yield. Despite its underwhelming growth, ABBV has a decent earnings growth projection of 9%, higher than the sector’s average, and better than its 5-year trend.

The growth metrics aren’t as strong as Amazon or Alphabet, with year-over-year growth and forward-looking growth both at around 1%, which is below both the sector and ABBV's 5-year average. However, with an estimated EPS of $12.19, the stock currently trades at a forward P/E of 12.4. Using our valuation models, the intrinsic value is estimated at $27, offering a larger margin of safety compared to the previous companies, with a potential upside of 15-20%. Wall Street is bullish on ABBV, with a target price of $210, suggesting a 24% upside.

Canadian Pacific Kansas City

Moving on to Canadian Pacific Kansas City (CP), this stock has only increased by 2% in the last year and 129% over the last decade, slightly underperforming the S&P. The stock is at the mid-to-low range of its 52-week price, with a double buy rating from Seeking Alpha and Wall Street. It offers a modest dividend yield of 0.66%.

Looking at growth, the company has strong year-over-year growth of 28.2%, surpassing both the sector and its 5-year average. Forward-looking growth for the next 12 months is projected at 18%, also above both the sector and 5-year average. The anticipated EPS growth is strong as well, with a 14.5% increase, which is above the sector's 11.6%. Although CP’s growth is somewhat cyclical, analysts predict growth in three of the next four quarters. The forward P/E ratio is currently 23.2, and its intrinsic value, based on our model, is $81. This means that CP is currently trading at its fair value, with no margin of safety, but with a 10% MOS, the buy price would be around $73, offering potential upside if it drops further.

ExxonMobil

Next up is ExxonMobil, which has risen by 9% in the last year and 25% over the past decade. It’s currently trading at the lower end of its 52-week range, with a dividend yield of 3.64%. Given the cyclical nature of the oil and gas industry, ExxonMobil’s growth is somewhat flat. Its year-over-year growth is at -2%, and forward-looking growth is not particularly promising either, though its EPS is anticipated to grow by 8%, which is better than the sector’s 6%.

Despite cyclical growth, ExxonMobil has a solid track record of beating EPS estimates, with a 75% success rate over the last four quarters. The stock is currently priced at a forward P/E ratio of 13.8. Using our valuation model, the intrinsic value is around $119, and with a 10% margin of safety, the stock would be a buy at around $95. Wall Street analysts have a price target of $133, representing a 23% upside.

Meta Platforms

Finally, we look at Meta Platforms, which has risen 66% over the last year and 751% over the last decade, massively outperforming the S&P. It's currently trading at or near its 52-week high. Meta also has strong growth metrics, with year-over-year growth of 23%, above both the sector and its 5-year average. Forward-looking growth is also strong, above the sector’s 2.3% and aligned with its 5-year trend of 17.2%. EPS growth is projected at 18.3%, significantly outperforming the sector’s 11.6%.

Meta’s earnings performance has been impressive, with 100% of its last four quarters exceeding expectations. The forward P/E ratio sits at 25.5, which is slightly higher than Alphabet’s 22.3. The intrinsic value estimate, based on our DCF model, is $657, with an 8% upside based on Wall Street's $700 price target for the next year. Members of Congress are clearly optimistic about Meta, and it's one of the most heavily purchased stocks in recent weeks.

Walmart

Next, we look at Walmart, a stock that members of Congress are actively buying. It’s up 77% over the past year and has significantly outperformed the S&P over the last decade, with a 226% increase. It is also trading near its all-time highs. Wall Street gives it a buy rating, close to turning into a strong buy, and the company offers a dividend yield of 0.88%.

Looking at growth, Walmart gets a C grade, with year-over-year growth slightly above the sector and about in line with its 5-year average. The forecasted growth for the next year is 5.2%, which is slightly higher than both the sector and its own 5-year rolling average. The earnings per share (EPS) is expected to grow by nearly 10%, outperforming both the sector and its 5-year average, which is positive. We also see a strong performance across various metrics, and the stock’s forward P/E is around 34-35, which could be considered on the expensive side given the growth prospects.

However, when we run it through our valuation models, Walmart is currently trading at a premium, not offering a margin of safety. To factor in a 10% margin of safety, we’d target a price of $74, and at 20%, it would be around $65. Still, members of Congress are buying, and Wall Street is quite optimistic with a price target of $110, indicating a potential 17% upside. This stock could be one to dollar-cost average into, as it has performed well recently and is trading near its 52-week highs. As always, let us know your thoughts.

Home Depot

Moving on to Home Depot, which has risen by 19% in the last year and nearly 300% over the past decade, massively outperforming the S&P. It’s currently trading at the higher end of its 52-week range, with another buy rating from Wall Street. The stock also pays a 2.2% dividend.

However, the growth metrics are less impressive, as it receives a D-minus for growth. Both year-over-year and forward-looking growth are underwhelming, especially considering the sector is showing stronger growth. Additionally, Home Depot’s EPS is expected to grow by only 4%, which is significantly lower than the sector’s forecast and its own 5-year average. That said, the stock still shows green across various performance metrics.

The stock’s forward P/E ratio is 20.6, close to the S&P’s average. Our valuation comes to $441, which aligns with Wall Street’s expectations of about a 6% upside. The margin of safety is between 5-10%, so while it’s not an ideal entry point for those looking for a significant discount, it remains a buy. As always, feel free to share your thoughts in the comments. Don’t forget to sign up for our free weekly newsletter, dropping a fresh copy every Monday morning, and check out our Patreon for weekly buys and sells. Have a great day, and we’ll see you in the next one!

As always, let us know your thoughts on these stocks, and don’t forget to check out our weekly articles for more in-depth analyses of undervalued stocks and market trends.

Disclaimer: I want to make it clear that I am not a financial advisor, and nothing I say is intended to be a recommendation to buy or sell any financial instrument. Additionally, it's important to remember that there are no guarantees or certainties in trading or investing, and you should never invest money that you can't afford to lose.

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