Congress Just Loaded Up On These 2 Stocks! [13:32]

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[transcript]

Congressional Trading Report 2025

Unusual Whales, the website that tracks congressional trading, just released their full report on Congress trading in 2025. And essentially like every single year, especially since 2020, there are plenty of congressional members who way outperform the S&P 500, with multiple members of Congress even returning well over 50%. Now, while this report is for the full year 2025, we’ve already seen a couple of interesting trades as we head into 2026. So, in this video, we’re going to be looking at two stocks that members of Congress have been recently buying.

To analyze these two stocks, we’re going to be using forecaster.biz, which you can check out at the link in the description. It’s a tool that I’ve started using more, and I like that you can easily overlay things like sales, net income, price to earnings, and dividends over the share price, so you can see correlation. But, let’s go ahead and dive in.

Stock Analysis: Broadcom (AVGO)

The first stock that members of Congress have been buying is Broadcom, stock ticker AVGO. Now, this is a stock that’s already a large position in Nancy Pelosi’s portfolio. It’s currently the second largest position. And as you might already know, Broadcom’s performance over the last 5 years has just been exceptional, up 673%.

If we look at the last 3 years, they’re up about 500%, and in the last year alone, up 53.76%, making it one of the best performing stocks in the S&P 500. Now, of course, what’s interesting about this is if we overlay what’s gone on with the sales for this company in the last 5 years, you can see that the share price has essentially followed the sales growth of the business. And on top of this, they’ve continued to grow dividends at a very high rate. In fact, if we scroll down, we can see back just in 2017, they were paying out about 10 cents per share in dividends. And look, now it’s more than 6x at about 65 cents per share.

Congressional Trading Insights

Now, let’s talk about congressional trading for a moment. If we jump over to the political tab here on Forecaster, one of the things we will notice is there is already significant congressional buying in Q1 and Q2 of 2025. I mean, we’re talking about millions of dollars in some cases, but don’t point out Q3 and Q4. There is still significant congressional buying, especially more buying than selling.

Now, when it comes to stocks like Broadcom, I see a lot of mixed reviews. Obviously, the stock has done unbelievably well in the last one, three, and five years. But look at what’s been going on with the PE multiple. The PE multiple has climbed extraordinarily high, especially in the last couple of years. In fact, if we look at the fundamentals tab, Forecaster’s listing the trailing 12 months PE multiple is about 70.37. There are very few stocks in the market with that high of a PE multiple. But it’s really important that we note a stock’s PE multiple by itself tells you absolutely nothing about the company without accounting for future growth rate projections.

So for example, if we jump over to the raw data, look at revenue charted out over the past few years. Again, the stock price has followed the revenue growth. It’s followed the fundamental growth, and we can see based on the trailing 12 months, this growth is continuing into 2026. Now to be fair as it relates to Broadcom, it’s important we understand where this topline growth is actually coming from because it certainly hasn’t all been organic. This company has actually pursued a lot of acquisitions over the years, and most recently they acquired VMware, and that was just a couple of years ago when revenue was sitting at about 35.8 billion. So around right here is when they made that acquisition, and obviously since then revenue has jumped quite a bit.

Growth Strategy and Financials

So what we can see right now is they’re pretty much pursuing growth at all costs. Let me show you an example of what I mean. If we scroll down all the way to the bottom of the income statement, look at what’s happened to average shares outstanding. We can see they’ve actually issued more shares outstanding over the past decade. Why is that the case? Typically, in most instances, that’s not something we want to see. But the reality is at certain time periods, it can actually be a good thing. If a company can issue new shares when they’re trading at an undervaluation, yes, it still dilutes shareholders, but with the capital that they raise, if they can get a very good return on investment from that capital, it can still actually be beneficial to shareholders.

So, yes, they’ve been issuing new shares. On top of this, look at what’s been going on on the balance sheet. If we scroll down and look at net debt again, what do you notice? Net debt has actually grown quite a bit for this company in the last few years. They are aggressively pursuing growth. And so the ultimate measure of whether or not this is actually paying off is by looking at what’s actually going on with free cash flow. Remember, a company has five options with free cash flow. They can reinvest back into the business, pay down debt, attempt mergers and acquisitions, buy back shares, and pay out dividends. And like we saw, Broadcom has rapidly grown dividends over the last few years.

So free cash flow has grown at a very high rate. We can see in 2024 they were sitting at about 19.4. Looks like trailing 12 months. They’re already sitting at 26.9. And growth, whether you’re looking at earnings or free cash flow, is expected to continue for Broadcom, especially at a high rate. Take a look at this. If we look at Broadcom and look at the average expected earnings growth over the next few years, 2026 EPS growth should be at about 50%, 2027 nearly 40%, and 2028 around 25%. This is some of the fastest earnings growth that you’ll see out of any company in the S&P 500.

Valuation Considerations

And so all that to say, yes, the PE multiple like we’ve seen on Forecaster looks extremely high at 70.37, but when you start to look at forward-looking PE multiples and account for that future earnings growth, it doesn’t look nearly as bad as you would think. This is why in a lot of instances, we actually want to look at the price to earnings growth multiple. Now, we’ll come back and talk about valuation in just a moment, but make sure you understand that Broadcom is not just another semiconductor company. Yes, Semiconductor Solutions is about 61% of revenue, and this is what a lot of people focus on because their products are used by companies like Google, Meta, and Anthropic. And the company already has a $73 billion backlog. That’s right, $73 billion in backlog.

So essentially, if we go back and look at topline revenue, we can see in 2024, it was 51.57 billion. Their management has stated they already have 73 billion in backlog for the next 18 months. So these earnings and revenue growth projections we’ve been talking about aren’t something that analysts are pulling out of thin air. These are projections that are based on the reality of the orders that are coming in for Broadcom. That should give you more confidence in the stock.

But then the other sector of the business is infrastructure software, and this is where they have made some acquisitions. But the good news is this portion of the business has extremely high margins and recurring revenue characteristics. So is it too late to buy Broadcom, or is there still potential opportunity? Well, here’s where things get interesting. Let’s assume for this stock that the PE multiple gets reduced drastically in the coming years. Maybe it falls all the way down to about 35. So essentially, the PE multiple is going to get cut in half.

Let’s also assume they’re able to meet earnings growth projections and that by the year 2028, estimated EPS will be sitting at about $17.60, meaning that earnings would have to grow at a rate of around 37.5% through the year 2028. Well, here’s what we can see. All of a sudden, if EPS by 2028 is about $17.54, which is actually slightly below the average analyst estimate, you’d still be looking at a compounded annual return of 15.41%, not including the dividends. And the dividend yield is low; it’s only sitting at about 0.7%, but again, dividend growth has been exceptional. So that gives you a return of around 77%, again not including dividends, likely closer to 80% when you include dividends.

So this is a great example. We have to reframe the way we think about valuation because yes, this PE multiple looks absurd at first glance, but when you consider the earnings growth projections that are actually being determined by the company’s backlog, all of a sudden the valuation doesn’t look as extreme as it would seem. And again, I think this is one of the many reasons that we’re seeing congressional members continuing to add Broadcom to their portfolio even though it performed so well in the last year after they already loaded up.

Verizon Communications Stock Analysis

And the second stock on our list is an interesting one. Not one you would typically expect to see on this type of list, but that’s Verizon Communications, the high-yielding dividend stock. And this stock has actually been on the list of Congress buys before, but it’s been bought even more so recently. So, look at the political buying. What do you notice? There wasn’t much activity for the last few years, but in Q4 of 2025, buying activity surged for this stock. In fact, we saw the most buying activity for Verizon that we’ve seen in the last 5 years in Q4 of 2025.

Now, this is interesting because really, if we look at the share price over the last 5 years, it’s down by about 29%. If we look at it in the last 10 years, it’s not much better, down by about 9.81%. Now, total returns obviously tell a different story because the stock is a high yielder. It’s yielding about 6.7% as of right now. So, what do we make of Verizon stock right now? What’s the issue? Why is the share price not climbing? Or is it still potentially a good dividend play?

Well, again, we have to remember over the long term, share price is going to follow the fundamental growth. And if we look at the sales growth over the last 5ish years, it’s really been relatively stagnant. We can see this; it hasn’t gone really anywhere. So, let’s dive into this a little bit more. If we jump back over to the fundamentals and look at the raw data, let’s take a look at revenue growth. This is what it looks like over the past decade. No wonder the share price really hasn’t moved. Revenue has not grown at a very high rate. Really, it’s been somewhat in line with inflation over the past decade.

Even if we come down here and overlay the one-year revenue growth rates, we can see it’s typically in the low single-digit range. Every now and then, they’ll actually have a year of negative revenue growth. Now, if we pull up the most recent earnings report, one of the things we will notice is we can see right here, total operating revenue in the third quarter was up 1.5% year-over-year. So, slight growth in that area. If we scroll down and look at things like total Verizon consumer revenue, that saw growth of about 2.9% year-over-year. And if we look at total Verizon business revenue, that was a decrease of 2.8% year-over-year. So again, even in the most recent quarter, we’re talking about very small changes in what revenue growth has actually looked like.

But that being said, with the outlook that they’re currently giving, they’re stating that they expect revenue growth to be in the range of 2 to 2.8% and adjusted EPS growth of about 1 to 3%. So they expect fundamentals to continue to grow, but it’s quite slow growth. So the reality is people who are interested in Verizon, they’re buying the stock primarily for one reason. One, they either think it’s undervalued at current prices or two, they’re buying it for the dividend. So really, let’s assess the sustainability of those dividends.

Now, if we look at the dividend history for this stock, they have a history of growing those dividends even though free cash flow has not been growing at a high rate. In fact, if we jump back over to this slide, we can see they have 19 consecutive years of growing that dividend. So certainly a dividend growth stock, but the dividend growth is quite slow. And we have to remember anytime a stock is growing dividends at a rate below the rate of inflation, that’s technically not dividend growth. That’s something to keep in mind that doesn’t get discussed very often.

Now, if we jump back over to their consolidated cash flow summary from their recent earnings presentation, again, we can assess the sustainability of those dividend payments. Dividends are paid out of free cash flow. And if we look at the 9 months of 2024, free cash flow is 14.5 while dividends paid out was 8.4 billion. So that’s a very sustainable dividend. And if we look at the 9 months of 2025, we can see yes, dividends are higher. They’ve grown their dividend payouts, but free cash flow is higher as well. So it continues to look like an actually very healthy around 7% starting dividend yield with relatively low leverage. It’s at least in their target range.

So what we can see is yes, that starting dividend yield looks sustainable at about 6.7%. But what about the valuation at its current prices? Well, to start, we can see they trade at an extremely low PE multiple, just 8.65. Essentially the opposite of what we just saw for Broadcom. A PE multiple far below the average of the S&P 500. But again, that doesn’t tell us how the stock is actually being valued because we have to account for future growth. And as we’ve already seen, growth is very slow for Verizon Communications.

Now, with that being said, we can still use a dividend discount model to value Verizon Communications. If they’re growing revenues, earnings, and free cash flow at a rate of about 2 to 3% moving forward, then dividend growth of 2.25% is sustainable moving forward. And if they can achieve that dividend growth rate, that would give them a fair value of about $44.54, implying 10% upside from their current prices. So absolutely this is by no means a high growth stock, not even a medium growth stock. It’s a very mature company that’s a very capital-intensive business with a lot of debt on the balance sheet. But with that being said, it does look manageable. The dividend looks sustainable and based on just a 2 to 2.5% dividend growth rate, the stock actually does look slightly undervalued. So we may see this share price revert back to its intrinsic value. But don’t expect a lot of growth past that other than the starting dividend yield that you’ll be receiving close to 6.67%.

So there you go. Those are two stocks that members of Congress have been recently adding to their portfolio.

Very interesting!

Broadcom now going at $351. per share
I guess my Megalomaniac ambitions will remain on the distant back burner for the time being.

By contrast, Verizon (NYSE:VZ) is cheap, pays over 7 percent at this price. The expectation of lower interest rates may be the main reason for the interest by the Critters, but they may also be loaded up with inside information.

👍 It’s never too late to start. 😁

Look at the chart for VZ. It’s movement over years is bad.

Buy some AVGO over the weekend,
and sell it about noon on Monday.

VZ seems to pay a reliable 7% dividend.

This past week there has been a storm-the-battlements rally for certain tech companies; I suspect there will be some burnoff on them. Naturally, over time, well-run companies go up in value, but not on a straight line. 🤔

Free cash flow for VZ:

https://www.macrotrends.net/stocks/charts/VZ/verizon/free-cash-flow

I certainly wouldn’t buy VZ for capital appreciation, but it is rock solid for a 7% dividend—at a time when it is tough to get even 4% on a cd or bond (not to mention the likely hood that interest rates will drop further in the coming year).

I watch clips of Cramer, and on the 9th he teased something about a company, Babcock & Wilcox, that's almost 200 years ago and may be an AI play, something like that. Huh? So I hunted down his promised discussion of it.

'Mad Money' host Jim Cramer weighs in on stocks including: Babcock and Wilcox and MNTN.
Lightning Round: MNTN stock is 'just awful', says Jim Cramer | 2:59
CNBC Television | 3.32M subscribers | 2,698 views | January 14, 2026
Transcript
>> It is time to talk about that time. I stepped up to the plate and Sam. And then the lightning round is over. Are you ready for the lightning round? We're going to start with Jim in Rhode Island. Jim.

>> Hey Jim Cramer, it's an absolute pleasure to speak with you.

>> Right back at you, my New England Patriots to play in. My condolences to you and your Philadelphia Eagles.

>> I very much appreciate that. It's been a very soul-searching time for me. And I do wish you the best of luck for the Patriots. How can I help?

>> Thank you, my friend. Hey, we've had a 35-year relationship that you're unaware of. I was a nuclear trained submariner, came out of the Navy and got a broker dealer to sponsor me in New Jersey in 1991. Wow.

>> So you so great.

>> You and CNBC have been part of my life since Kudlow and Cramer.

>> So love it.

>> Thank you. Let's help. Let's help everybody with a great deep value play. Two brothers, two friends in Rhode Island, Stephen Wilcox and George Babcock. Babcock and Wilcox formed in 1867, sold the steam generator to Mr. Tom Edison. Boy.

>> You know, you're absolutely right. I've got to tell you. First of all, thanks for watching for so long and back. Bom Kim Wilcox. Now, unfortunately, it's up 30% for the year, but it is a great spec on the construction of power plants. Let's wait until it goes down a little bit and then pull the trigger. And thank you for serving. Let's go to Larry in New Jersey. Larry.

>> Big Jim, how you doing?

>> I'm doing well. Larry, how you been?

>> I'm doing great, thanks. First-time caller, long-time listener. Calling about Mountain Norton.

>> I initially said it was good that it was able to retract that. Thank heavens this stock is just awful. I cannot believe, I mean, they got to make money. They have to make money or else it won't turn around. It became public in a very exciting time and it is going lower without earnings per share. And that, ladies and gentlemen, is the conclusion of the lightning round.

>> The lightning round is sponsored by Charles Schwab.
YouTube transcript reformatted at textformatter.ai.

Capital appreciation due to falling interest rates isn’t unlikely, but would be a short-lived phenomenon.

VZ could become a trap regardless, as direct-to-satellite builds out over the next few years.

Fatter dividends are available elsewhere among various capital mgmt outfits, but they are interest rate sensitive and are not immune to economic fluctuations.

Jim Cramer is an idiot.

He gets on my nerves (typical NBC politics), but he’s no idiot.

Is there an ETF that trades based on following insiders?

You can’t simply buy a stock that insiders buy, because you would also have to track when they sell. They might not buy & hold.

An ETF is probably the best way to ride the tech tsunami that’s been going on, assuming it has a track record of good performance.

Years ago a financial journalist had a piece in one of the mags back then. He looked at the best performaing mutual funds (ETFs are kinda new to this old guy who types with my hands), then researched who the managers were, and found that the all best performing funds had been run by just a handful of the best managers.

Even the middlin’ ones can keep track of a basket of stocks better than any one of us can.

In “Beating the Street”, Peter Lynch suggested self-managed portfolios are probably best limited to just five stocks.

Nanci Pelosi is the New Cathy Wood.