Insider trading alert — credit scoring service up 70% since congressman’s purchase

Back on May 15, Representative Josh Gottheimer of New Jersey’s 5th congressional district disclosed an April 29 purchase of $1,001 to $15,000 in Fair Isaac Corporation (NYSE: FICO) shares — since then, FICO stock has been on a rapid, sustained rise, posting a 70% rally, reigniting discussion as to whether public officials should be permitted to trade specific stocks.

The purchase is certainly timely — a fact not helped by Gottheimer’s membership on the House Financial Services Committee, responsible for financial oversight and regulations, among other things. FICO stock price was $1,143 on April 29 — one of the very rare red days that the credit scoring company has had on a year-to-date (YTD) chart.

Depending on the amount invested (which the public is not privy to), the representative could be up anywhere from $708 to $10,620 on this single trade, according to the latest data from the US Senator Stock Trading Radar by Finbold.

Gottheimer’s outsized gains and net worth

At press time, FICO is trading at $1,953 per share — having surged by 72.69% YTD. Gottheimer’s purchase saw him capture a vast majority of that upswing — in absolute terms, the stock price rose by $810 in that timeframe, for a 70.8% rally.

In contrast, the S&P 500 is up only 11.32% over the same period.

Gottheimer is a particularly active trader, even in his esteemed company of peers — and has been for years. Per his 2023 financial disclosure report, Finbold estimates his net worth to be between $7,351,390 and $73,127,022.

In addition, the congressman held significant positions at Microsoft (NASDAQ: MSFT) and Ford Motor Company (NYSE: F), before moving on to work as a lawyer, public policy advisor, and ultimately a representative.

Josh Gottheimer’s history of profitable trades

Apart from the fact that Gottheimer is consistently one of the most active traders in Congress, he has a curious history of profitable trades — outperforming even Nancy Pelosi and famed investor Michael Burry. 

On October 3, he disclosed a September 25 investment in Crinetics Pharmaceuticals (NASDAQ: CRNX), a stock that no politician had traded thus far. A day after the representative’s trade, the company filed a new drug application (NDA) with the Food and Drugs Administration, and the stock’s price subsequently saw an 11.66% increase.

A January 24 purchase of Agios Pharmaceuticals (NASDAQ: AGIO) was another of his pharma plays — with the stock currently up 88.7% YTD. 

His July 19 investment in defense contractor Northrop Grumman is up 21.93% at press time — not to mention his March 8 purchase of $27 million Microsoft call options, or the 32 stock trades made on September 6, worth a total of $480,000. 

While FICO has had a stellar year, expanding its SaaS offerings, and building critical partnerships with Cognizant (NASDAQ: CTSH) to prevent fraud, the impeccable timing of these trades raises questions pertaining to unfair advantages. 

Traders and investors looking to take a page from Gottheimer’s book should pay close attention to any new trades disclosed by the congressman, as well as FICO’s next earnings report, due November 13.

Disclaimer: Estimating a Congress Representative’s net worth is challenging because disclosure forms do not mandate exact values. Instead, they report the value of their assets and liabilities within specified ranges. While we strive to accurately estimate net worth from filings, disclosure rules have shortcomings. Personal residences, certain personal property, and federal retirement accounts are often not reported. Large assets can be listed in broad categories like “Over $1 million” or “Over $50 million,” potentially worth much more. Additionally, Josh Gottheimer earns $174,000 annually, but this isn’t required to be disclosed.