THE WEALTH ADVISORY

August 2021

THE WEALTH ADVISORYBY A N G E L F I N A N C I A L

August 2021 Issue

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A N G E L F I N A N C I A L’ S

THE WEALTH ADVISORY

Going With the Flow

The Mekong River starts flowing from the Tibetan Plateau and 2,700 miles later it hits the shores of Vietnam and empties into the South China Sea.

The significance of the Mekong for Southeast Asia can’t be understated. Thirteen times more fish are hauled from its water than in all of America’s waterways combined. Civilization around the Mekong has adapted fully to the demands of the giant river. Houses on stilts are ubiquitous. And in some lakes fed by the Mekong, people have even dispensed with stilts and simply built entire towns that float on the water.

One of the biggest of these floating towns is Tonlé Sap, Cambodia. It sits on the shore of Tonlé Sap lake, which is fed by the Tonlé Sap river. Tough to get lost when everything has the same name, I guess….

The Tonlé Sap river is a completely unique river. It is the only river in the entire world that reverses its flow on a seasonal basis. Sometimes the Tonlé Sap Lake flows up the Tonlé Sap River to feed the Mekong; other times the Mekong feeds the lake.

Given the ebbs and flows of the lake created by the dual challenges of its relationship with the Mekong and the vagaries of the rainy and dry seasons, the diameter of the lake can change pretty dramatically over the course of the year. At the low point during the dry season, it might cover 1,000 square miles. During the rainy season, the lake can cover over 6,000 square miles.

A person new to the area and traveling by boat might ask a local fisherman for directions to the nearest town for supplies. And he might be told the nearest town sits right over there, on the southwestern shore of the lake.

Now, if it were the dry season, a regular town might be so far inland from the shore that the traveler wouldn’t even see it. And in the rainy season, who knows? Maybe the town would be underwater.

But the town of Tonlé Sap floats. So it can always be found right where it’s supposed to be, on the edge of the lake….

Like I said, tough to get lost…

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The Right Place

I will confess: I learned about Tonlé Sap from an episode of the BBC car show, Top Gear. I suggested the show to my son a while back, and we watch a couple episodes a week together.

When I saw the Mekong/Tonlé Sap story, it struck immediately as the perfect metaphor for how the successful individual investor behaves.

A defining feature of a town is that it is largely permanent. People move to a town for houses to live in and businesses to work in.

For an investor, you have your house or business. This is your structure. This is what you know and understand, what you’re comfortable with. Maybe you like tech. Maybe it’s retail that you understand. Maybe it’s telecom stocks that speak to you…

I would never tell you to stop trying to learn about other sectors and industries. After all, any house can become constraining and additions are not at all uncommon.

But no addition to a structure should fundamentally change or weaken it. And so I would also never tell you to stray from what you know and understand just because tech is out of favor or the market seems to like dividend stocks.

Jason and I have had the good fortune to make this stuff a career, so we have had decades to devote to expanding our knowledge of industries and sectors. We may know a lot, but we also know what we don’t know…

Like biotech…

Jason’s dad was a longtime pharmacologist at AstraZeneca’s predecessor companies, ICI and Zeneca. But Jason opted for the rowing team in college. I was the son of a history professor, musician, and ski bum. Biotech is simply not in our wheelhouse, so you will rarely see it in the Wealth Advisory portfolio.

Of course, we did recommend Gilead Sciences in January of 2020 at $64 a share, just a couple months before COVID swept the globe. Gilead wasn’t intended as a COVID play, but turned out its remdesivir was a very effective treatment for the disease.

Shoulda been a borderline genius/slam-dunk investment right? Eh, not so much.

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That Gilead position has been dead money for nearly two years. And you’ll find our recommendation to sell Gilead and take our measly 20% profit in this month’s Portfolio Update section.

In any event, I have found that I am much more prone to mistakes when I wade into unfamiliar waters. I suspect it is the same for most. So it is essential that an investor knows his or her self, who they are, and who they are not.

The whole point of having a structure, of having an expertise or an area of the market that you know and understand, is so that you can be rigid and steadfast when you know you’ve got a winning investment on your hands.

The stock market isn’t always right. Stocks get mispriced. Because investors don’t always see and agree on the potential of an individual company. In bear markets, stocks get oversold and fall to prices that are simply too cheap. In bull markets, stocks get overbought and the prices are too high…

Maybe an unexpected miss on a quarterly earnings report causes a sell-off. Maybe good news about a competitor pushes the price lower…

If you really know the industry and sector that you invest in, then you’ll know when there’s value that the market doesn’t recognize. And you’ll be able to hold that stock until the value is recognized.

Jason and I have held more than a few of the best Wealth Advisory stocks through adverse times. Albemarle, Twilio, Innovative Industrial Properties, Scotts Miracle-Gro, Qualcomm — we’ve responded to subscriber concerns about each of these companies. And in each case, the overall market eventually recognized the value...

Zen and the Art of Stock Market Investing

So back to the floating town analogy: If your house or business represents your style of investing, then the location of your floating structure on the lake represents how you deal with the ebbs and flows of the stock market.

Apologies in advance because I have to get a little zen with this part, but the simple fact is there’s no easy answer. With the stock market, it’s not possible to always be in the right place. Take this year, 2021, for example…

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I know a fair amount of professional investors and traders. Both groups have one description for the stock market in 2021: frustrating.

One day tech is up. The next day tech is down and steel or oil is rallying. The big institutions and funds are grappling with Fed policy and it’s essentially impossible to predict how the market will react when Fed policy tightens. So no sector or industry is really trending.

Especially the traders I know, they are not having a good year at all. I know what the problem is. After a year like 2020, where making money was like shooting fish in a barrel, it is very hard to slow down or stop trading altogether.

Force of habit can be very strong. It is easy to get anchored by your structure and forget or ignore the way the market changes.

The most important way to keep your floating structure in the right place is to not move really fast or impulsively. There is NEVER a “sell everything” moment in the stock market.

Even if you had sold well ahead of the worst of the financial crisis, would you have been able to buy back at the lows? Probably not. I received emails from subscribers in 2012 saying I was nuts to recommend Bank of America at $9 a share!

Ebbs and flows tend to take time. This year is another prime example. Everyone knows that the Fed is going to take action at some point. So there has been plenty to take a little off the table and take advantage of new opportunities.

Remember the Wealth Advisory mantra: Great businesses attract new customers, great management lowers expenses over time, and a growing base of loyal customers and a little inflation mean that revenue and earnings rise over time and so does the stock price.

OK, that’s enough from me. I yield the floor…

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Feature RecommendationBrit and I are constantly scanning the market for opportunities. And sometimes we find a company on the verge of really breaking out.

But sometimes that breakout comes before we’re able to get a recommendation out to add the stock to our model portfolio. That’s exactly the case with this month’s feature recommendation.

You see, Brit keyed into this company a little over a year ago. It was trading for just under $20 but had the look like it was about to break that resistance and go on a long run.

Unfortunately, that run started while we were finishing our due diligence. The stock went from $17 to $20. And then it jumped up to $30. Then to $40.

After just a few weeks, it had more than doubled in price. And it didn’t slow down. The shares topped out just shy of $70.

We loved the company at $20 because there was so much long-term potential. But at $70, most of that potential was baked into the price and we didn’t really see any more upside.

So we moved on to a different stock, but we kept our eyes on this one. There’s just massive profit potential for the company and the market it’s made the focus of its efforts.

And we kept an eye on it because sometimes you get a second chance to make that first investment. And that’s just what happened last week.

The stock had been sliding as investor enthusiasm has waned. This is a long-term growth play and the people buying it weren’t willing to wait for profits — especially the ones who bought it at $70.

But it finally hit a level where we see ample upside again. So after tracking its progress for over a year, we’re ready to give it a coveted spot in The Wealth Advisory model portfolio.

Now, without further ado, let’s get into the details and I’ll tell you why we’re making this company the Feature Recommendation for August 2021…

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Jumia Technologies AG (NYSE: JMIA)

Current Price: ~$20

Market Cap: ~$2.1 billion

52-Week Range: $7–$70

Shares Outstanding: 98.59 million

Cash on Hand: $486.5 million

Jumia Technologies has been called the “Amazon of Africa.” That’s kind of funny to me because the Amazon of Africa would probably be the Nile or the Niger. But that’s not the kind of Amazon they’re talking about.

Jumia gets compared to Amazon.com because it’s the biggest and fastest-growing e-commerce platform serving the continent of Africa.

And while you may not find that very exciting (because Africa is a pretty poor continent), I’m going to do my best to show you why that assumption is wrong.

Shooting Up the Charts

Usually when I write a headline like that, it’s to segue into a discussion about a stock price. But that’s not the chart I’m talking about today.

I’m actually talking about global population charts. Africa is shooting up them and is projected to keep outpacing the rest of the world.

Africa is already a massive market for any company to address:

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THE WEALTH ADVISORY

But according to the U.N.’s projections, the population in Africa is going to double by 2050. That may seem like a long way out, but it’s less than three decades away. And that’s going to pass quickly.

That growth is going to take African nations from having some of the smallest populations in the world to being some of the most populous.

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That’s because African nations are expected to grow faster than any others on the planet:

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In fact, by 2047 Nigeria is expected to have a population bigger than that of the United States.

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THE WEALTH ADVISORY

But that’s not the most impressive part. Stretch those projections out to the end of the century and you’ve got five of the top 10 biggest populations in the world calling Africa home.

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In fact, Africa is the only world region projected to have strong population growth the whole time. All the others are expected to peak and start to shrink.

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The main bullet point of this part of the presentation is obviously that Africa is growing and it’s growing fast.

It’s going to be an economic center in the future. And getting positioned now will make sure we’ve got the best shot at reaping the biggest rewards.

Growing Continent, Growing Company

Since I’ve already told you about the Amazon comparison, I don’t really need to get into the business side of this business. You already know what it does.

It does the same thing as Amazon. And it’s dominating e-commerce in its target market.

It’s the leading pan-African e-commerce platform and already boasts some pretty impressive numbers…

And it’s growing that market share by focusing on consumer engagement to keep customers within its ecosystem.

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That’s helped the company create a truly massive footprint across the entire continent:

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But it’s not just buyers who’re in love with Jumia in Africa. The company also provides a very attractive value proposition for sellers as well.

With a large and growing customer base, a localized seller center interface, and even access to financial services, it’s a one-stop shop for anyone who wants to set up an online shop.

Being able to attract the best sellers and the best buyers has given Jumia a major advantage and helped it become THE dominant force in African e-commerce.

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And that puts it in the best position for continued growth as populations and incomes grow and e-commerce adoption spreads across Africa.

Then, you’ve also got JumiaPay, the company’s digital payments solution. If Jumia is the Amazon of Africa, then we can think of JumiaPay as its PayPal.

It’s a uniquely tailored payment solution for African consumers because it’s linkable with lots of payment methods (think banks and credit cards), is seamlessly integrated into the shopping experience, and provides a dedicated payment app.

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That gives it the potential to become the leading pan-African payment and fintech player. And that adds even more potential upside to an early investment.

It also makes the company a scalable technology platform that’s custom-built for the needs of the African e-commerce industry.

From logistics to payments to consumer engagement and even infrastructure management, it’s got what Africa needs as it continues to grow and flourish.

There’s just so much potential packed into this company I don’t have enough space to cover it all.

But not everything is sunshine and happy thoughts; there are some risks (as with every investment) and some headwinds to get past as well.

So let’s talk a little about that before we get down to the bottom line.

“Pandemic Challenges”

It’s not news that COVID threw a monkey wrench into the global economy. Shutting the world down was apparently not good for business.

But as vaccines get out there, we’re opening back up and slowly getting back to a semblance of normal.

Fortunately for us but unfortunately for everyone who’s not us, the United States is a rich country. Even our poor are rich on a global scale.

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We’re also the proud parents of several of the companies that created effective COVID vaccines.

And that means we can afford and get access to as many doses as we want. We’ve got two for every citizen who wants them.

But that’s not the case in the majority of countries around the globe. Most people don’t have access to the vaccines some Americans are refusing to get. And it’s going to take a long time to get them supplied.

That’s going to be a big problem in Africa. And it’s likely to limit Jumia’s growth for at least the rest of 2021 and probably some of 2022.

But those vaccines are going to get there and we will get COVID under control around the world. And Jumia’s stock will be a coiled spring ready to explode upward when that happens.

That means we may see some ups and downs in the near term as the continent gets through the pandemic and the company returns to meteoric growth.

But after all is said and done and humanity triumphs once again, we can see Jumia turning early investments into potential fortunes as it keeps on growing with Africa.

The Bottom Line

Africa is growing and it’s growing fast. Populations are expected to double in the next few decades.

With that population growth will come GDP growth and income growth too. And with five of the 10 fastest-growing economies soon to be in Africa, Jumia is well-positioned to grow with them.

We see this as an opportunity to get in on a company that could match or even exceed Amazon’s stock performance over the long run.

And at current prices, we just can’t pass up this deal. So we’re adding Jumia Technologies to The Wealth Advisory model portfolio as this month’s feature recommendation.

TWA Bottom Line: We’re adding Jumia Technologies AG (NYSE: JMIA) common stock to the model portfolio with a buy limit of $25 and a 12-month price target set at $35.

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The Wealth Advisory PortfolioThe Wealth Advisory portfolio is strategically designed to offer you both long-term dividend growth and capital appreciation. Our rigorous analysis consistently uncovers the best dividend and growth opportunities available today. This is our current portfolio, along with recent earnings, news, and our thoughts on each position.

Click on the company names to be directed to the original recommendations with more information about each company and our original reasons for entering the positions.

Dividend Growth

The true secret to getting wealthy in the stock market is deceptively simple: Buy solid dividend-paying stocks and reinvest those dividends. Studies repeatedly show that as much as 70% of stock market gains come from dividends.

That may sound like a boring, even obvious, observation. But it’s actually quite profound because it takes away virtually all the risk from investing.

When you buy a dividend stock, you don’t have to wait for the stock to move higher to make money. A dividend stock starts to pay back your investment the minute you buy it. And it will continue paying long after you’ve recouped your initial investment.

When you focus on dividend payments, you can systematically plan for wealth creation.

Albemarle Corporation (NYSE: ALB)

What It Does: Albemarle Corporation develops, manufactures, and markets engineered specialty chemicals worldwide. The company offers lithium compounds, including lithium carbonate, lithium hydroxide, lithium chloride, and also lithium specialties and reagents for applications in lithium batteries and other markets.

Wealth Advisory Earnings Grade: A+

• Beat expectations in four of the past four quarters.

Headlines:

• Albemarle launches new lab to build better batteries for EVs.

https://media.angelnexus.com/pdf/twa/twa-october-2017-awi.pdf

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TWA Bottom Line: Albemarle has been feeling the tailwinds from a potential trillion-dollar renewable-energy focused infrastructure package. Shares are up nearly 30% since last month and are poised to keep heading higher. Management reported earnings above expectations earlier this month and raised the full-year guidance. There is still a lot of growth ahead for this industry and this company. Keep adding shares below the newly raised limit and you’ll be set up for long-term gains.

Albemarle Corporation (NYSE: ALB) is now a “Buy” anywhere under $230. The 12-month target is $300.

Bank of America Corporation (NYSE: BAC)

What It Does: Bank of America Corporation operates as a bank holding company that offers consumer and retail banking services, real estate financing, wealth management services, global corporate and commercial banking, investment banking, and global fixed income and equities services.



Headlines:

• Bank of America sees improving credit metrics in July.

TWA Bottom Line: Bank of America came back up about 5% last month. The company is boosting its dividend by about 17% and reported improving credit metrics for July. Other than that, it was a relatively quiet month. We’ll be getting that enlarged payout on September 24 and we’ll get it on any shares we own as of September 2. If you’re thinking of adding and want that bigger dividend, make sure you pick them up before the market closes. And make sure you keep your buys below the limit price.

Bank of America Corporation (NYSE: BAC) is still rated a “Buy.” The limit price is $45. The 12-month target is $55.

https://www.angelpub.com/pubaccess/qc/update/qc/296

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Bunge Limited (NYSE: BG)

What It Does: Bunge Limited operates as a global agribusiness and food company through five segments: Agribusiness, Edible Oil Products, Milling Products, Fertilizer, and Sugar and Bioenergy.



Headlines:

• Corn, soybeans extend multiyear highs as China adds to buying spree.

TWA Bottom Line: Bunge came back a little this month as well. It’s up about 4% as I type the update and looks like it has more room to run. Inflation is not transitory, despite what the politicos want you to believe. Commodity prices still have a lot of distance to cover to get even close to all-time highs. We’re still bullish and still recommend adding shares below our limit price.

Bunge Limited (NYSE: BG) is still rated a “Buy.” The limit price is $95. The 12-month target is $125.

Cisco Systems, Inc. (NASDAQ: CSCO)

What It Does: Cisco Systems designs, manufactures, and sells internet protocol (IP)-based networking and other products that are related to the communications and information technology industry worldwide.



Headlines:

• Cisco closes acquisition of Kenna Security and Socio Labs.

https://assets.angelpub.com/pdfs/2021/20/twa-may-2021-1813.pdf

http://media.angelnexus.com/pdf/twa/twa-september-2016-cef.pdf

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TWA Bottom Line: Cisco climbed about 6% last month, as investors see the value in the company’s recent acquisitions. Management recently closed the acquisition of Socio Labs and announced Cisco will be buying application monitoring company Epsagon. The company is also pushing to lure AWS customers back to its data centers through a subscription service that would help the companies move their tasks from the open cloud services such as AWS back to private servers that are easier to secure.

Cisco Systems Inc. (NASDAQ: CSCO) stock is a “Buy” anywhere under $60. The 12-month price target is $75.

Dick’s Sporting Goods (NYSE: DKS)

What It Does: CDick’s Sporting Goods operates as a sporting goods retailer primarily in the United States. It is the largest omnichannel sporting goods retailer in the country and operates 726 corporate stores. It also owns and operates Golf Galaxy, Field & Stream, and other specialty concept stores.



Headlines:

• Dick’s attracts new bullish coverage ahead of reopening period.

TWA Bottom Line: Dick’s is up about 10% this month after crushing earnings expectations yet again. Just as we predicted, the company came in far above EPS estimates and investors loved the surprise. People are still staying away from indoor activities. And a lot of indoor activities are still having trouble getting staffed. Dick’s has a lot more room to grow as people continue to rediscover the outdoors. We’re still bullish on this company and this stock, and we encourage everyone to keep adding below our new limit price.

Dick’s Sporting Goods (NYSE: DKS) stock is a “Buy” anywhere under $120. The 12-month price target is $175.

Element Solutions Inc (NYSE: ESI)

What It Does: Element Solutions Inc. produces and sells specialty chemical products

https://assets.angelpub.com/pdfs/2020/43/twa-october-2020-1728.pdf

https://assets.angelpub.com/pdfs/2021/29/twa-july-2021-1844.pdf

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for the electronics industry and for other industrial applications such as the control fluids for offshore deep-water oil production and drilling applications.



Headlines:

• Element Solutions Inc. to buy specialty chemical producer Coventya.

TWA Bottom Line: We added Element Solutions last month as a play on both the continued growth of the consumer electronics market and the resurgence of the offshore oil industry. With fewer new oil discoveries coming, offshore wells will become efficient again and ESI will supply the chemicals to keep them running. And as electronics become more affordable and more accessible, ESI will sell more products for their treatment and production. There’s a long future ahead of this company, and we’re happy to add shares below the new limit price.

Element Solutions Inc. (NYSE: ESI) stock is now a “Buy” anywhere under $30. The 12-month price target is $45.

Gilead Sciences, Inc. (NASDAQ: GILD)

SELL ALERT: We’re still very bullish on Gilead in the long run, but it’s just not moving fast enough right now and there are better places to put our money. So we’re taking the small gain we’ve got and setting it aside for new investments.

Leidos Holdings, Inc. (NYSE: LDOS)

What It Does: Leidos Holdings delivers technology solutions and services to the national security, health, and engineering markets in the U.S. and internationally.


• Beat estimates in four of the past four quarters.

Headlines:

• Leidos to compete in final phase of Armed Overwatch competition.

https://assets.angelpub.com/pdfs/2020/03/twa-january-2020-1541.pdf

http://media.angelnexus.com/pdf/twa/twa-november-2016-9ww.pdf

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TWA Bottom Line: Leidos took a hit after reporting-less-than stellar earnings this month. Shares are down about 9%. But you already know how we feel about this — it’s a buying opportunity. Leidos is still one of the biggest and best contractors out there and it specializes in information security. That’s going to be a big industry for a long time. We see LDOS as a coiling spring getting ready to explode to the upside.

Leidos Holdings Inc. (NYSE: LDOS) is a “Buy” anywhere under $110. The 12-month target is $125.

NXP Semiconductors N.V. (NASDAQ: NXPI)

What It Does: NXP Semiconductors provides high-performance mixed-signal solutions for radio frequency (RF), analog, power management, interface, security, and digital processing products worldwide.



Headlines:

• Global semiconductor sales increased 26% in May.

TWA Bottom Line: NXPI gained about 6% this month after management reported better-than-expected earnings early in August. Revenue grew 42% year over year and EPS came in above estimates. Despite the ongoing chip shortage, management gave an upbeat forecast for the rest of the year and investors loved what they heard. We’re fans of the long-term potential here and are content to keep adding shares below our new limit.

NXP Semiconductors N.V. (NASDAQ: NXPI) is now a “Buy” under $220. The 12-month target is $250.

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Qualcomm Inc. (NASDAQ: QCOM)

What It Does: Qualcomm develops, designs, manufactures, and sells digital communications products and services in China, South Korea, Taiwan, the U.S., and internationally.



Headlines:

• Qualcomm acquires team and assets from AI company Twenty Billion Neurons.

TWA Bottom Line: Qualcomm is up about 5% this month. Management reported earnings late in July and beat on both metrics. Revenue grew by 65% Y/Y and the company sees a good end to the year. Management gave upside guidance for the final quarter that was above even raised analyst expectations. And all that’s without the full adoption of 5G. Qualcomm still has a lot of upside left. Keep adding shares below our limit.

Qualcomm Inc. (NASDAQ: QCOM) is a “Buy” under $175. The 12-month target is $225.

The Scotts Miracle-Gro Company (NYSE: SMG)

SELL ALERT: The Scotts Miracle-Gro Company is still a solid long-term investment, but I’m not a huge fan of the company’s new plan to get into the plant-touching side of the cannabis industry. It’s a support company and should stick with what it knows best. I can see more headwinds coming, so we’re taking our gain and putting it to work elsewhere. The official action will be to enter a limit sell order at $155.

http://media.angelnexus.com/pdf/twa/twa-december-2016-ala.pdf

https://media.angelnexus.com/pdf/twa/twa-september-2017-28k.pdf

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Real Estate Investment Trusts (REITs)

It’s generally assumed that real estate investment trusts (REITs) are very interest rate sensitive. But studies show that REITs perform better than regular stocks when interest rates are rising.

I won’t be selling REITs just because interest rates are rising. We have nice gains with these stocks, and they consistently raise their dividends. Plus, we know the Fed won’t be going on a prolonged rate-hike campaign. Three small hikes won’t have much of an impact on REITs. So, in a general sense, I’m not expecting a lot of downsides for REITs. I’m actually expecting a lot of upside, even with the rate increases.

Finally, please note the importance of the funds from operations (FFO) metric for REITs. Analysts tend to use FFO instead of earnings per share (EPS) when evaluating REITs.

CoreSite Realty Corporation (NYSE: COR)

What It Does: CoreSite Realty Corporation is a REIT that builds, manages, and leases data center spaces.



Headlines:

• CoreSite adds connectivity and on-net availability to Google Cloud in Chicago.

TWA Bottom Line: CoreSite had a decent month and is up about 4%. Management presented earnings above expectations and revenue that grew by about 8% Y/Y. The company hasn’t gotten any buyout offers as of yet, but the price for one would likely fall in the $154–$170 range. We’re not betting on an acquisition, although we’d take the premium if we got it. We like CoreSite’s ability to steadily grow revenues and dividends over time. And we’re still adding shares below the new limit price.

For CoreSite Realty Corporation (NYSE: COR), I still have a “Buy” rating, with the limit now set at $150 and the 12-month target at $185.

https://www.angelpub.com/twa/january-2014-grn.pdf

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Hannon Armstrong (NYSE: HASI)

What It Does: Hannon Armstrong is a REIT that provides capital and services to the energy efficiency, renewable energy, and other sustainable infrastructure markets in the United States



Headlines:

• HASI sees revenue growth of 7%–10% and dividend growth of 3%–5% for 2021.

TWA Bottom Line: Hannon Armstrong is up about 4% this past month after posting stellar earnings results earlier in the month. FFO of $0.57 per share came in above estimates, and revenue of $58.89 million wasn’t even comparable to estimates in the $26 million range. Management expects distributions to grow at an annual rate of 7%–10% per year until 2023. And we expect the shares to get a lot of investor attention as more green infrastructure spending is announced.

I rate Hannon Armstrong (NYSE: HASI) a “Buy” under $60. The 12-month price target is $100.

Innovative Industrial Properties (NYSE: IIPR)

What It Does: Innovative Industrial Properties is a REIT that’s focused on the acquisition, ownership, and management of specialized industrial properties leased to experienced, state-licensed operators for their regulated medical-use cannabis facilities.

Wealth Advisory Earnings Grade: B+

• Beat or met expectations in three of the past four quarters

Headlines:

• IIPR boosts dividend 6%, to $1.40 per share.

https://assets.angelpub.com/pdfs/2021/16/twa-april-2021-1801.pdf

https://media.angelnexus.com/pdf/twa/twa-december-2017-1r2.pdf

https://media.angelnexus.com/pdf/twa/twa-december-2017-1r2.pdf

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TWA Bottom Line: Whether you’ve been with us for a little while or a long while, you probably understand why IIPR is our favorite pot stock. It’s up another 12% this past month after management blew earnings out of the water and boosted our dividend. We’re now getting $1.40 per share per quarter. That’s more than we were getting per year when we first invested! Revenues last quarter rose 101% Y/Y. Management is continuing to expand the company’s footprint, adding fully leased properties almost monthly. We’ve come a long way, but there’s still so much more to go. I’m boosting the limit so everyone can participate.

I rate Innovative Industrial Properties Inc. (NYSE: IIPR) a “Buy” under $245. The 12-month price target is $325.

Omega Healthcare Investors, Inc. (NYSE: OHI)

What It Does: Omega Healthcare Investors invests in health care facilities, primarily in long-term health care facilities with a focus on skilled nursing facilities.



Headlines:

• Omega Healthcare Q1 beat shows improvement as COVID cases decline and vaccines continue to roll out.

TWA Bottom Line: OHI is our only REIT that’s down this month. All of that decline can be attributed to an earnings report the market didn’t appreciate. FFO came in above expectations, and revenue beat as well, but growth was nearly nonexistent. On a positive note, though, rent collections remained strong and the company was able to strengthen its balance sheet over the quarter. We like OHI for steady long-term dividend growth and are still adding shares in the model portfolio.

I rate Omega Healthcare Investors Inc. (NYSE: OHI) a “Buy” anywhere under $40. The 12-month price target is $50.


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Prologis, Inc. (NYSE: PLD)

What It Does: Prologis is the global leader in logistics real estate with a focus on high-barrier, high-growth markets. It leases modern distribution facilities to approximately 5,000 customers across two major categories: business-to-business (B2B) and retail-online fulfillment.



Headlines:

• Prologis boosts 2021 guidance after record rent growth in Q2.

TWA Bottom Line: It’s been a quiet month on the news front, but that didn’t keep Prologis from drifting higher after last month’s stellar earnings and guidance update. Shares are up over 5% as I type and look to keep rising. They’re now bumping up against our new limit. I’m keeping that there for the month, but will reassess if the stock holds above it.

Prologis Inc. (NYSE: PLD) is rated a “Buy,” with a new limit entry price of $135. The 12-month price target is $150.

STAG Industrial, Inc. (NYSE: STAG)

What It Does: STAG Industrial is an industrial real estate investment trust (REIT) focused on the acquisition and operation of single-tenant industrial properties throughout the U.S.

Wealth Advisory Earnings Grade: A

• Beat or met expectations in four of the past four quarters.

Headlines:

• STAG Industrial boosts monthly payout.

https://assets.angelpub.com/pdf/twa/twa-may-2018-5hd.pdf

https://media.angelnexus.com/pdf/twa/twa-february-2018-kf2.pdf

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TWA Bottom Line: STAG is still drifting higher after its guidance boost, earnings beat, and dividend hike last month. Shares are up nearly 7% and are bumping up against our limit buy price. We’re comfortable leaving it set for the month and will reassess in September.

STAG Industrial Inc. (NYSE: STAG) has a “Buy” rating of anywhere under $45. The 12-month price target is $55.

Uniti Group Inc. (NASDAQ: UNIT)

What It Does: Uniti Group engages in the acquisition and construction of infrastructure in the communications industry in the U.S.


• Beat or met expectations in four of the past four quarters.

Headlines:

• Uniti Group raises full-year guidance after Q1 revenue beat.

TWA Bottom Line: Uniti is up over 20% this month! Management reported earnings earlier in the month and missed FFO expectations by a razor’s edge. Revenue also came in slightly below expectations, but the improvement over the prior year’s quarter was so impressive investors didn’t seem to mind the miss. Net income of $0.20 per share was a massive increase over the $3.26 per share loss we saw last year. Management also reaffirmed full-year guidance. The company is executing on its growth strategy, and sales are increasing. The continued focus on the high-margin fiber assets should help us get to the next level — a dividend hike and a $20–$30 stock price.

Uniti Group Inc. (NASDAQ: UNIT) is rated a “Buy” with a limit entry price of $15. I have a 12-month price target of $30.

http://media.angelnexus.com/pdf/twa/twa-january-2016-3gh.pdf

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Capital Appreciation

Here at The Wealth Advisory, we focus on income-generating investments. And you already know why. Dividends make up as much as 70% of stock market gains. But the other big chunk of profits comes from stocks that grow in value over time — otherwise known as capital appreciation.

Now, we’re long-term investors here, so the biggest part of our profits comes from collecting and reinvesting dividends. But there’s no reason that we should be sitting out on solid investments profiting from capital appreciation, too. And that’s where this category of stocks comes into play. Here is where we’ll be looking for growth stocks, acquisition targets, and companies that might not pay dividends (and might never pay dividends) but will keep rising in share prices and add to our portfolio gains.

AquaBounty Technologies, Inc. (NASDAQ: AQB)

What It Does: AquaBounty Technologies, Inc. develops and markets products to enhance productivity in land-based aquaculture. It offers AquAdvantage Salmon, a bioengineered Atlantic salmon for human consumption.

Wealth Advisory Earnings Grade: C+

• Beat or met expectations in two out of four quarters.

Headlines:

• AquaBounty reports earnings: EPS in line, revenue grows to $230,000.

TWA Bottom Line: AquaBounty is down over the past month. Management presented earnings early in August and didn’t thrill investors. EPS was in line with analyst estimates. But there was some good news. The company is selling fish. Its revenues for the previous quarter were $230,000 (that’s more than 7,000% more than last year). So we can take some solace in that. Brit’s got another letter out to the management suggesting they avoid the term “GE” salmon in presentations. The term has some negative connotations, but it’s the only way we’re going to be able to keep feeding an ever-growing population.

AquaBounty Technologies Inc. (NASDAQ: AQB) common stock is a “Buy” under $10. The 12-month target is $30.

https://assets.angelpub.com/pdfs/2021/03/twa-january-2021-1755.pdf

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Chewy, Inc. (NYSE: CHWY)

What It Does: Chewy, Inc. provides pet food, pet products, pet medications, and other pet health products for dogs, cats, fish, birds, small pets, horses, and reptiles through its chewy.com retail Website, as well as its mobile applications.


• Beat expectations in four out of four quarters.

Headlines:

• Delta variant favors online retail stocks.

TWA Bottom Line: Chewy is up about 14% this month as investors shift from reopening stocks to online companies in the face of growing Delta variant cases of COVID. I hope you took my advice and didn’t listen to the people saying the online trade was dead. I also hope you took advantage of the price while it was low. If you didn’t get to, don’t despair. Chewy is a lot more than some COVID story. It’s a long-term growth play everyone should own.

Chewy Inc. (NYSE: CHWY) common stock is now a “Buy” under $95. The 12-month target is $155.

GreenBox POS (NASDAQ: GBOX)

What It Does: GreenBox POS is a point-of-sales company that engages in the development, marketing, and sale of blockchain-based payment solutions that facilitate, record, and store a volume of tokenized assets, representing cash or data, on a blockchain-based ledger.

Wealth Advisory Earnings Grade: C-

• GreenBox missed expectations in its first quarter with analyst coverage.

Headlines:

• GreenBox announces spinoff of stablecoin platform and special dividend.

https://assets.angelpub.com/pdfs/2021/25/twa-june-2021-1824.pdf

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TWA Bottom Line: GreenBox dropped farther this past month. I’ve already addressed it in several updates, but it bears repeating. The company is being affected by turbulence in the crypto world, but it’s not necessarily related to the kind of cryptos experiencing the turbulence. GreenBox provides payment system solutions that enable banks to do business with more varied types of companies. It removes the risk from transactions. And its stablecoin is both backed by U.S. dollars and well-protected against hacking.

GreenBox POS (NASDAQ: GBOX) common stock is a “Buy” under $15. The 12-month target is $30.

Green Dot Corporation (NYSE: GDOT)

SELL ALERT: Green Dot is still a company I can see having a bright future, but it’s not been doing much for us lately and we need to free up some space in the portfolio for new investments. We’ll set a limit sell order at $48 and look for new places to reinvest.

Invitae Corporation (NYSE: NVTA)

What It Does: Invitae Corporation, a genetic information company, processes DNA-containing samples, analyzes information related to patient-specific genetic variation, and generates test reports for clinicians and their patients in the U.S., Canada, and internationally.

Wealth Advisory Earnings Grade: B-

• Beat expectations in two of the past four quarters.

Headlines:

• Invitae approached for potential merger with Exact Sciences.

https://assets.angelpub.com/pdfs/2020/29/twa-july-2020-1667.pdf

mailto:https://assets.angelpub.com/pdfs/2018/47/twa-november-2018-1160.pdf?subject=

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TWA Bottom Line: Invitae had a great start to the month, as it jumped nearly 10% on news that it had been approached for a potential merger with Exact Sciences. I’ve gone over the offer in detail in an update already, so I’ll just focus on the aftermath. The deal would likely be all stock and would not value Invitae at any reasonable premium. Investors sold shares after realizing this. If a premium offer came, I’d be inclined to see the benefit of a merger. But for now, I’d prefer Invitae remain independent.

Invitae Corporation (NYSE: NVTA) is a “Buy” under $35. The 12-month target remains $75.

Lemonade Inc. (NYSE: LMND)

What It Does: Lemonade, Inc. provides various insurance products in the United States and Europe. The company offers homeowners and renters insurance, personal liability coverage, and landlord insurance policies. It also operates as an agent for other insurance companies.


• Beat expectations in three of the past four quarters.

Headlines:

• Lemonade shares drop after Q2 losses match estimates.

TWA Bottom Line: Lemonade fell this month after management reported quarterly losses that matched estimates and continued to prolong the launch of the company’s car insurance program. I’ve addressed the drop in a recent update, so I’ll just focus on the long-term view — and that’s a company that is disrupting an industry ripe for disruption. Lemonade has a long life ahead of it and we’re just at the beginning.

Lemonade Inc. (NYSE: LMND) is a “Buy” under $100. The 12-month target is $195.

https://assets.angelpub.com/pdfs/2020/35/twa-august-2020-1696.pdf

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Maxar Technologies, Inc. (NYSE: MAXR)

What It Does: Maxar Technologies, Inc. provides space technology solutions for commercial and government customers worldwide, including communication and imaging satellites, space-based and airborne surveillance solutions, and robotic systems.

Wealth Advisory Earnings Grade: B-


Headlines:

• Maxar satellite delay weighs on quarterly results.

TWA Bottom Line: Maxar gave back more ground this month after delaying the launch of its next satellite. This is another thing I’ve addressed in a recent update, so again, I’ll just focus on how we’re playing it. We still like Maxar in the long run and are happy to add shares at this undervalued level. Cash flows are coming back and the dividend should grow soon too.

Maxar Technologies Inc. (NYSE: MAXR) is a “Buy” anywhere under $45. The 12-month target is $105.

Ping Identity Holding Corp. (NYSE: PING)

SELL ALERT: Ping Identity Holding Corp. also has a ton of future potential, but we need space in the portfolio and there are better opportunities out there for the near term. A recently announced share sale at about $24 caused a sell-off, but I expect the stock to recover and will set a $25 limit sell order for the model portfolio.

https://assets.angelpub.com/pdfs/2019/38/twa-september-2019-1467.pdf

https://assets.angelpub.com/pdfs/2020/22/twa-may-2020-1635.pdf

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QuantumScape Corporation (NYSE: QS)

What It Does: QuantumScape Corporation develops and commercializes solid-state lithium-metal batteries for electric vehicles. The company was founded in 2010 and is headquartered in San Jose, California.

Wealth Advisory Earnings Grade: C-

• Missed expectations in two out of two quarters.

Headlines:

• QuantumScape sells off after earnings miss.

TWA Bottom Line: QuantumScape was about flat in QuantumScape terms. Shares dropped 6% over the month, but after the wild swings we’ve seen along the way, that seems like not moving at all. But it actually was a bumpy month for QS and all EV stocks as infrastructure news went this way and that and the markets tried to keep up. That’s all short-term noise, though. We’re interested in the long-term here. And in the long run, QS is looking more and more likely to succeed in making the holy grail of batteries. The CEO just gave a positive update on the 10-layer cell testing results. Just a few more steps to the factory.

QuantumScape Corporation. (NYSE: QS) is a “Buy” under $35. The 12-month target is $100.

Rocket Companies (NYSE: RKT)

What It Does: Rocket Companies is a holding company consisting of the personal finance and consumer service brands Rocket Mortgage, Rocket Homes, Rocket Loans, Rocket Auto, Rock Central, Amrock, Core Digital Media, Rock Connections, Lendesk, and Edison Financial.

Wealth Advisory Earnings Grade: B


Headlines:

• Rocket Companies takes off after Q3 guidance impresses markets.

mailto:https://assets.angelpub.com/pdfs/2020/51/twa-december-2020-1748.pdf?subject=

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TWA Bottom Line: Rocket is up nearly 13% this month, even after missing earnings expectations midmonth. Investors weren’t concerned about the small miss because management guided for stable growth in Q3. A slowdown was something worrying analysts and investors, and when one didn’t appear they sent the stock soaring. It’s still below our buy limit, however, and we’re content to keep adding shares for the long term.

Rocket Companies Inc. (NYSE: RKT) common stock is a “Buy” under $25. The 12-month target is $40.

Spotify Technology S.A. (NYSE: SPOT)

What It Does: Spotify Technology S.A. provides music-streaming services worldwide through two segments: premium (subscription-based) and ad supported (free with commercials).

Wealth Advisory Earnings Grade: A-

• Beat expectations in three of the past four quarters.

Headlines:

• Spotify announces potential plans to enter live event space with concerts.

TWA Bottom Line: For some reason, Spotify got hit hard this month. Management reported excellent earnings numbers. EPS came in $0.22 above estimates and revenue beat too, growing by 23% Y/Y. Monthly active user numbers were above estimates. Even forward guidance was better than expected. In fact, the report was good enough to warrant an upgrade by analysts at Guggenheim. So the fact that shares went down this month means we should be buying. Everything is looking up for Spotify, and soon the price will follow suit.

Spotify Technology S.A. (NYSE: SPOT) is a “Buy” under $225. The 12-month target is $300.

https://assets.angelpub.com/pdf/twa/twa-june-2018-94k.pdf

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StoneCo Ltd. (NASDAQ: STNE)

What It Does: StoneCo is the Square of Brazil. It’s a payment processor that gets a piece of each transaction and it focuses on the mostly unserved market of small to medium-sized business.

Wealth Advisory Earnings Grade: B+

• Beat or met expectations in three of the past four quarters.

Headlines:

• StoneCo raises $500 million in first dollar bond offering.

TWA Bottom Line: StoneCo is reporting earnings this week and shares are down as I type. It was a volatile month for the stock, despite being relatively quiet as far as company-specific news goes. But we’re playing the long game here and we see the potential for massive growth in the future. Brazil is still a cash-based economy, but that’s changing as people realize how convenient electronic payment is and how easy viruses can spread on cash. There’s a massive market still left to digitize, and StoneCo should get a large piece of it.

StoneCo Ltd. (NASDAQ: STNE) is a “Buy” under $75. The 12-month target is $150.

Twilio Inc. (NYSE: TWLO)

What It Does: Twilio provides a cloud communications platform that enables developers to build, scale, and operate communications within software applications through the cloud as a pay-as-you-go service in the U.S. and internationally.



Headlines:

• Twilio to dual-list on Long-Term Stock Exchange.

https://assets.angelpub.com/pdfs/2019/25/twa-june-2019-1409.pdf


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TWA Bottom Line: Twilio is down a little bit this month after beating earnings but posting mixed guidance. EPS came in slightly higher than estimates and revenue beat by about $70 million. Sales grew by nearly 70% year over year. And the company expects full-year revenues to come in between $670 million and $680 million. But EPS estimates are for a much bigger loss than analysts were anticipating. So that took the wind out of the rally that could have been. We’re still bullish in the long run and expect the company to keep improving margins and growing sales. So we’re happy to keep adding shares under the buy limit.

I rate Twilio Inc. (NYSE: TWLO) a “Buy” under $375. The 12-month target is $450.

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The Wealth Advisory © Angel Publishing 2021, 3 E Read Street, Baltimore, MD 21202. All rights reserved. No statement or expression of opinion, or any other matter herein, directly or indirectly, is an offer or the solicitation of an offer to buy or sell the securities or financial instruments mentioned. While we believe the sources of information to be reliable, we in no way represent or guarantee the accuracy of the statements made herein. The Wealth Advisory and Angel Publishing do not provide individual investment counseling, act as an investment advisor, or individually advocate the purchase or sale of any security or investment. Neither the publisher nor the editors are registered investment advisors. Subscribers should not view this publication as offering personalized legal or investment counseling. Investments recommended in this publication should be made only after consulting with your investment advisor and only after reviewing the prospectus or financial statements of the company in question. Unauthorized reproduction of this newsletter or its contents by Xerography, facsimile, or any other means is illegal and punishable by law.

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