The Way of the Future: 3 Green Hydrogen Stocks To Supercharge Our Portfolios

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A recent analyst report shows that burning fossil fuels produces about 83% of the world’s carbon emissions. Governments worldwide are attempting to shift focus to more renewable energy sources as the ongoing political and social conflicts surrounding the climate problem only seem to grow. The study also predicts that green hydrogen will lead the decarbonization effort and play a crucial part in enabling a complete transition to net zero by 2050. No more nasty emissions! Zilch. Natural gas output is anticipated to be 70% lower, and oil production will likely be down more than 55% from where it is now by 2050. Coal? Doesn’t stand much of a chance.

In a continuous attempt to decarbonize heavy industries, long-haul freight, shipping, and aviation, green hydrogen has been funded with various emissions reduction pledges from the UN Climate Conference, also popularly called “COP 26.” The Green Hydrogen Catapult, the Inflation Reduction Act, and other legislative initiatives by the European Commission aim to provide secure, clean energy on a global scale by decarbonizing the gas market using renewable sources. If you were asked which renewable energy source is the best to use and you answered with “green hydrogen,” then by all accounts, you’d most likely be correct. As investors, we know that renewable energy is buzzing and gaining popularity. For now, I’m going under the radar with green hydrogen stocks to show off a few of the industry’s greatest.

Let’s get into the three green hydrogen stocks I picked; I’ve accounted for performance, recent events and developments, growth, analyst sentiment, and what a stock’s intrinsic value could be. Experts agree that we should grab these hydro-tickers:

Shell PLC (SHEL)

Shell PLC (SHEL) is an oil and petrochemical business with operations in Europe, Africa, Asia, the U.S., and the rest of North and South America. SHEL extracts natural gas, crude oil, and natural gas liquids, markets and transports such resources, and runs the upstream and midstream infrastructure required to give gas directly to the market. SHEL also markets and trades energy, carbon-emission rights, and LNG as fuel for heavy-duty vehicles. Furthermore, SHEL manufactures basic chemicals ranging from basic aromatics to detergent alcohols. SHEL also generates power using wind and solar energy, produces and sells hydrogen, and offers electric car charging services (as well as electrical storage). In January 2022, the business changed its name from Royal Dutch Shell PLC to Shell PLC. SHEL was established in 1907 and is based in London, England.

Since 2015 — after shifting its focus from greenhouse gasses — SHEL has been gradually implementing a sustainable energy transition, investing heavily in wind and solar power, green hydrogen generation, and reforestation. SHEL aspires to be a net-zero-emissions energy company by 2050. SHEL is doing quite well, with 39 hedge funds currently holding approximately twenty million shares, equaling roughly $1 billionSHEL now has a P/E ratio of 5.02x, and a decent 0.68 beta, making it less volatile than the broader market. To showcase its Q3 2022 performance, I’ll lean on my new approach by listing the year-over-year growth with what’s reported: Revenue – $95.75 billion (+59.46%), Net Income – $6.74 billion (+1,608%), EPS – (+1,633%), and Profit Margin – 7.04% (+1,051%). SHEL beat Wall Street analysts’ Q3 revenue projection by a margin of 103.78%SHEL has a dividend yield of 4.29%, with a quarterly payout of 62 cents per share ($2.48 a year). Analysts that offer annual price estimates give SHEL a consensus median price target of 70.00, with a high of 78.70 and a low of 60.00. The assessment is a 21.94% increase over current pricing; it gives us another excuse to take advantage of SHEL’s buy rating.

Linde PLC (LIN)

Linde PLC (LIN) is an industrial gas and engineering firm with operations in North and South America, the Middle East, Africa, Europe, and Asia Pacific. LIN provides atmospheric gases like oxygen, argon, nitrogen, and rare gases. In addition, LIN designs and builds turnkey process plants for third-party clients and gas shops, promoting several varieties, such as olefin, natural gas, hydrogen, and synthesis gas facilities. LIN has been involved in other business sectors: healthcare, energy, manufacturing, food, beverage carbonation, fiber optics, steel manufacturing, aerospace, chemicals, and water treatment. LIN was formed in 1879 and is headquartered in Woking, England.

There is an active Hydrogen Council of which LIN is a member. LIN has invested in wind-powered plants that transform water into hydrogen and has predicted that by 2035, hydrogen vehicles will likely be competitive with EVsLIN started producing green hydrogen on a large scale in France, Greece, and other European nations as of November 2022. Of course, LIN is a favorite of mine for timely events, but it also shows excellent past performance. From Q4 2021 to Q3 2022, LIN bested analysts’ projections on both lines; for four consecutive quarters. Here are LIN’s Q3 financials with corresponding yearly growth: Revenue – $8.8 billion (+14.72%), Net Income – $1.27 billion (+30.03%), EPS – $2.54 per share (+35.11%), and Profit Margin – 14.47% (+13.31%). 

LIN has a dividend yield of 1.40%, with a quarterly payout of $1.17 ($4.68 annually). Analysts who offer yearly price projections have given LIN a median price target of 350.00, with a high of 380.00 and a low of 260.00. This is a 4.69% increase from the last price, and speaking of price—LIN’s buy rating holds up because it is considered undervalued, making the price a bargain. It’s hard not to like this one.

Plug Power Inc (PLUG)

Plug Power, Inc. (PLUG) specializes in developing, designing, and manufacturing hydrogen and fuel cell systems for handling materials and stationary energy storage sectors. PLUG’s fuel cell system solutions are intended to replace lead-acid batteries in some distribution and manufacturing enterprises’ electric vehicles, as well as industrial trucks. George C. McNamee and Larry G. Garberding created PLUG on June 27th, 1997, and it is located in Latham, New York.

I gushed over the first two, and they deserved it. It’s not that PLUG isn’t a good stock; it is, but it’s simply not operating on the same scale as LIN and SHEL. In other words, PLUG is a grower and probably best suited for long-term investors. That said, PLUG showed sales of $161.9 million for 2021. In 2022, PLUG is estimated to finish the year with $350 million, an estimated 113% growth from last year. Analysts forecast 33.30% more growth to end Q4 2022 and 21.60% growth in the first quarter of 2023. For Q3, PLUG’s big silver lining was in the $188.63 million sales, representing 31.06% growth.

PLUG has a market cap of over $9 billion and a higher daily average volume (17.2 million) than its peers on this list combinedPLUG’s stock is down by 47.01% year-to-date, which could explain such modest and speculative financials. However, there is also an opportunity to be had here. Analysts’ 12-month price estimates give PLUG a median target price of 28.00, with a high of 78.00 and a low of 15.00. This is an enormous 87.17% increase over the last pricePLUG’s upside potential is obvious enough to justify its buy rating. Although it’s not as “big” as its peers, it comes down to whether it’s the right stock for you and at the right time. Look at all the factors. Do your due diligence. Keep an open mind but a cautious one.

Read Next – Bloomberg: This fuel is the key to “solving the energy crisis.

It’s time for you to take part in the greatest energy revolution of our lifetime.

It’s projected to be 10X bigger than the electric vehicle revolution…

Which turned an early $500 investment in Tesla into $207,000. 

And it will be bigger than the solar power revolution…

Which would have turned a $2,500 investment in Enphase Energy into over $1 million.

This is the greatest energy investing opportunity of our lifetimes. 

And the best part is…

According to Bloomberg, President Biden has “almost guaranteed” that investors will have a shot at making a fortune from this brand new type of energy. 

Because it holds the key to “solving the energy crisis” in America. 

And Biden has authorized $80 billion be spent immediately to bring this new type of energy to market ASAP. 

And for the small company at the center of this energy revolution, their share price is about to go through the roof. 

A small $500 stake could potentially turn into $234,000. 

Those billions of federal funding are set to be dispensed any minute…

And when that happens, this stock is expected to rocket to the moon. 

So, you need to see the details about this opportunity right now. 

We explain everything. 

Take a look here. 

Three Stocks to Watch for the Week of December 5th

A mid-week rally lifted stocks last week, but by Friday, the market had given back much of the gains. The moves higher were driven by comments from Fed Chair Jerome Powell signaling smaller interest rate hikes could start as early as the December 13 – 14 FOMC meeting. However, a stronger-than-expected jobs report on Friday raised concerns about prolonged aggressive Fed tightening, taking the wind out of the market’s sails. The major indices finished with modest weekly gains, with the Dow gaining 0.2%, the S&P 500 rising 1.1%, and the Nasdaq climbing 2.1%. The S&P 500 recorded its second positive month in a row in November, posting a 5.4% total return. All 11 sectors were positive; materials were the strongest performer, and consumer discretionary was the weakest, according to S&P Dow Jones Indices.  

The week ahead will bring more updates on inflation and the state of the economy. Market watchers will be looking for clues on how high inflation, rising interest rates, and an economic slowdown are impacting consumer confidence when the University of Michigan releases the preliminary December reading of its Consumer Sentiment Index (MCSI). Also, on Friday, the Bureau of Labor Statistics (BLS) will release its Producer Price Index (PPI) for November. The PPI tracks inflation from the standpoint of goods-producing businesses and is considered a bellwether for the trajectory of consumer inflation.   

The decline in tech has brought investors what many would consider a once-in-a-lifetime opportunity in some notable names. Our first recommendation for this week is one such company with many positive attributes, including a deep economic moat, high operating margins, and a strong balance sheet to boot.

Google parent Alphabet (GOOG, GOOGL) shares traded for as low as $83.49 in the days following its recent 20-for-1 stock split. The stock has been steadily recovering, stacking on more than 20% over the past month.   At around $100 a share, the stock is still accessible for investors seeking big tech at a fair price. The company has multiple catalysts in the wings, which should keep momentum strong as enthusiasm for big tech stocks re-accelerates.   

Over the last five years, GOOGL is up 101%, crushing the Nasdaq’s 64% gain and the Internet Services Market’s 72% gain over the same period. The company posted earnings per share of $1.21 on revenue that grew by 12.6% year-over-year to $69.69 billion. The consensus sees earnings dropping 7% in 2022 but rising in 2023 at $5.80 a share. Top-line growth is expected, with 2022 sales expected to climb 11% and another 10% in 2023 to $260.44 billion.

Key catalysts to watch out for include its artificial intelligence tools that help users search in new ways, such as Google Lens, which is currently being used over 8 billion times a month.   Google also recently introduced a new multi-search feature to help users search with both words and images simultaneously. Shares also have a strong rebound potential once the digital ad market recovers.   

At 20 times forward earnings, Alphabet shares are trading in line with the S&P 500. Still, the current multiple may underestimate the company’s potential to re-accelerate earnings once its many growth catalysts start to play out.

A name offering defensive growth from the desirable sector currently is UnitedHealth Group (UNH). As the most significant health insurance company by market cap and market share, UNH’s size gives it built-in advantages over peers from the group.   

Despite the market slowdown this year, UNH’s share price is up more than 6%, outperforming its peers and the broader market. The Health Care Select Sector SPDR Fund (XLV) is up a fraction of a percent YTD, while the S&P 500 is still down more than 15%.  

Due to UnitedHealth’s rapidly expanding reach, Q3 revenue was up 12% from the same quarter last year to $80.89 billion. Earnings came in at $5.79 a share, surpassing the consensus estimate of $5.42 per share. In the third quarter, the company reported expanding its customer base by approximately 850,000, including 185,000.   “The strength of our performance reflects the diligence and determination of our colleagues to improve people’s experience across the health care system and make high-quality care simpler, more accessible, and more affordable,” said Andrew Witty, CEO of UNH. The company also increased its 2022 EPS view to $21.85-$22.05 from $21.40-$21.90. The consensus expectation is at the low end of the company’s forecast, at $21.87, suggesting that the pros on Wall Street may not give enough credit to the health insurance giant.   

Momentum should be supported in the coming years thanks to UNH’s strong market position and attractive core business. Its international business expansion provides substantial diversification benefits and shields against the impact of tightening U.S. regulations while allowing the Dow giant to tap into the $8.3 trillion spent annually on global healthcare.

UnitedHealth has a solid history of rewarding investors with a steady paycheck. The company went to a quarterly dividend in 2010 and, since then, has increased its dividend every year. That includes a 16% bump last year to $1.45 a share, which works out to a yield of 1.10% at its current price. UNH’s payout has increased 31% over the past five years, and the stock has a 5-year annualized dividend growth rate of 17.18%. The stock looks like a value at about 26 times earnings, compared to the healthcare industry, where the average P/E is around 34.

Vertex Pharmaceuticals (VRTX) is the undisputed leader in cystic fibrosis therapies. The company’s portfolio of approved CF drugs will deliver at least an estimated $8.4 billion this year, made possible by intense market penetration and decades-long devotion to research and development in the space. 

So far, the company has remained strongly profitable and has continued to expand revenue within the CF market at a steady pace. If management’s plans for expanded approvals for younger age cohorts continue to come to fruition over the next few years, Vertex will eventually be treating as many as 90% of all people with CF.

The company is moving its pipeline beyond CF with a handful of mid-stage clinical programs for pain relief, kidney disease, and genetic hematologic disorders like sickle cell disease. In other words, even if it eventually corners the entire CF therapy market, there will still be other growth opportunities.  

One potential catalyst is its partnership with CRISPR Therapeutics (CRSP) in developing gene-editing treatments for two rare blood disorders, which is expected to begin regulatory studies in March 2023. This means investors can look forward to a steadily increasing flow of new revenue and expanded approvals, which should significantly support the stock’s price.   

Of 26 analysts offering recommendations for VRTX, 18 give the stocks a Buy rating, and nine rate it a Hold. There are no Sell ratings. It seems likely that Vertex will reward patient investors as the steadily growing biopharma company seems ripe for expansion for years to come.  

Three Stocks to Avoid Next Week

Seeking out great stocks to buy is important, but many would say it’s even more essential to know which stocks to steer clear of. A losing stock can eat away at your precious long-term returns. So, determining which stocks to trim or eliminate is essential for proper portfolio maintenance.  

Even the best gardens need pruning, and our team has spotted a few stocks that seem like prime candidates for selling or avoiding. Continue reading to find out which three stocks our team is staying away from this week. 

Despite rising consumer prices, Americans kicked off the holiday season with record spending on Black Friday and Cyber Monday. As a result, many retail and e-commerce stocks are seeing a nice holiday boost. However, some names will enjoy the holiday cheer more than others.  

One e-commerce firm to be cautious about is online furniture and home goods seller Wayfair Inc. (W). Wayfair saw a dramatic recovery from its pandemic lows as consumers focused on their homes. With shelter-in-place orders in effect and mortgage rates at record lows, Americans snapped up spacious family houses, leaving behind once-desirable apartments in the city. As a result, Wayfair’s share price rocketed 572% from its March 2020 low to a high of $340 by August 2020. Sadly for anyone who jumped on the post-pandemic bandwagon, W stock has fallen nearly 90% since then and is currently trading at $42.10, 50% below its pre-pandemic price. 

Opportunistic bargain hunters may be eyeing the stock’s momentum due to a 12% increase over the past four weeks. However, those looking for e-commerce stocks to ride the holiday wave would do better looking elsewhere. Not only has demand shifted, but consumers are also now met with economic pressures, which inevitably affects discretionary spending, and Wayfair is feeling the pinch. The online retailer’s active customers shrunk by 1 million quarter-over-quarter in Q3 or more than 4% to 22.6 million, down a whopping 22.6% from the year-ago period. The trend of dwindling customers may continue amid rising consumer prices. 

Wayfair has only managed to turn an annual profit once – in 2020. From the looks of it, 2022 will not be the year that changes. Operating loss for the year has already surpassed $1 billion, while the year-to-date net loss is $980 million. Over the past six weeks, the median consensus forecast has been slashed by nearly 25% to $40, representing a loss of 5% from its current price.   

According to CME data, investors expect to see short-term interest rates jump to a range of 4.25% to 4.5% by the end of the year, pointing to an increasingly likely recession in the wings. According to The Economist, a recession formed within two years in six of the past seven rate hiking cycles where rates increased this rapidly.  

One stock that has been especially vulnerable during recessions that may surprise you is aircraft maker Boeing (BA). The share price has dropped an average of 40% in the past five recessions, underperforming every other S&P 500 stock by the same metric. Shares of Boeing sank 56% in the recession that began in 2020, 43% in the one that started in 2007, and 47% in the 2001 recession. 

Despite its role as a leader in commercial airplanes, demand seems to evaporate for Boeing products during recessions, along with its typically healthy backlog and demand for the stock. That presents a real hazard for anyone eyeing BA after plunging 37% so far this year. This could be just the beginning of Boeing’s losing streak if a recession is forming.  

At their September lows, Boeing shares were approaching levels comparable to the early days of the pandemic.   If the economy is indeed heading toward an extended slowdown, it could take years for Boeing to reach previous heights. Given all of the uncertainties combined with the lack of any significant positive catalyst for the company heading into 2023, we’re sticking to the sidelines on the stock.  

Over the past two years, the dramatic shift from brick-and-mortar shopping to e-commerce has been a tremendous obstacle for investors in malls and shopping centers. The demise of cornerstones like Sears and JCPenny hastened the decline as shopping malls are now left without anchor tenants.   Recent data suggests that 25% of America’s 1,000 malls will be closed in the next 3-5 years.  

Rising interest rates are cooling off the entire housing sector, with mortgage applications in their fourth month of declines, dropping to the lowest level since 1997. The 30-year fixed mortgage rate is currently 6.46%, more than double what it was just one year ago. Home resales are sitting at a two-year low. According to the latest data from the US Department of Housing and Urban Development,  new residential construction fell 8.1% month over month across the US in November. More pain is expected as the Federal Reserve is widely forecast to continue lifting interest rates through the remainder of 2022 and into 2023 to dampen inflation.

As the largest homebuilder in the U.S., Texas-based D.R. Horton (DHI) is likely to be impacted by the slowdown in the housing market. DHI’s share price is down 33% already this year, outpacing the decline of the S&P 500. As the housing market slows further heading into winter, more declines can be expected. The company has been slowing its number of housing starts in response.

In its most recent Q3 earnings, D.R. Horton forecasted a slowdown, saying it now expects full-year revenues from $33.8 billion to $34.6 billion, down from its previous guidance of $35.3 billion to $36.1 billion. The company also reported a Q3 cancellation rate of 24%, up from 17% the previous year. With an increasing number of analysts predicting a housing recession, the company could be forced to further lower its earnings forecast.

Two Stocks to Buy and One to Sell Next Week

After a midday turnaround on Friday, stocks erased early losses and finished the week little changed. The S&P 500 and the Nasdaq logged modest weekly gains, while the Dow was down for the week. After a week of mixed economic data, our team has two recommendations of stocks to buy and one to sell heading into the close of the year.   

Since the U.S. government officially introduced the first-ever tax credit for energy storage projects, there have been remarkable positive business developments in the industry. Our first buy recommendation for today is a company gaining traction as plans for much-needed upgrades to the nation’s aging power grid unfold.    

NextEra Energy (NEE) is the world’s largest solar and wind energy producer. They’re owners of Florida Power & Light, along with some other utilities and businesses that do wholesale energy. They’re also the sponsor of NextEra Energy Partners, which is primarily renewable energy focused. Renewables are a big part of NextEra’s business. NextEra has emerged as the world’s most valuable utility, primarily by betting on utilities, especially wind.  

NextEra had about 30 gigawatts of wind and solar farms at the end of last year, enough to power 17 million homes. And it’s expanding significantly, with contracts to add another 10 gigawatts of renewables. 

For decades, NextEra Energy has been reducing emissions through the development of renewable energy and the modernization of its generation fleet. The company’s goal is to reduce the CO2 emissions rate by 67% by 2025 from a 2005 baseline. This equates to a nearly 40% reduction in absolute CO2 emissions, despite the company’s total expected electricity production almost doubling from 2005 to 2025. Working toward this goal, as of year-end 2021, NextEra has reduced its CO2 rate by 62.2%  and the absolute CO2 tons by 20% while their generation increased by 67.5%. That’s pretty impressive.  

NextEra Energy has more energy storage capacity than any other company in the U.S., With more than 180 MW of battery energy storage systems in operation. The company leads the industry with storage innovations such as its Babcock Ranch Solar Energy Center – the largest combined solar-plus-storage facility in the country. This cutting-edge project incorporates a 10-MW battery storage project into the operations of a 74.5-MW solar power plant.

NextEra has a solid track record of success. Between 2006 and 2021, their adjusted earnings per share grew at a compound annual growth rate of 8.4%, while dividends grew at a compound annual growth rate of 9.4%, that’s incredible growth over 15 years. Over the past five years, the stock is up 137% on a total return basis. That type of performance is not typical for a utility company, indicating that NextEra is an outlier in the industry. 

The undisputed global leader in identity security, CyberArk (CYBR), has been gaining attention on Wall Street. The stock is up 26% over the past six months and could continue to gain heading into 2023. Regardless of any short-term earnings volatility, the potential for long-term, steady growth is too great to ignore.  

CyberArk’s innovations occur across its self-hosted solutions and expanding SaaS portfolio of privileged access management, secrets management, and cloud privilege security offerings, helping its customers enable “Zero Trust” by enforcing least privilege. Under the framework of its Zero Trust approach, its teams can focus on identifying, isolating, and stopping threats from compromising identities and gaining privilege before they can do harm.

The Israel-based company was recently named a leader in the Gartner Magic Quadrant for Privileged Access Management for 2021. It was positioned both highest in the ability to execute and furthest in the completeness of vision for the fourth time in a row. It comes as no surprise the business has been attracting customers to its subscription-based services, which means tremendously reliable cash flow, a good sign for anyone eyeing the small-cap.  

For its third quarter, CyberArk reported a 133% growth acceleration from the previous year’s quarter of the subscription portion of its annual recurring revenue (ARR) to $255 million. Total ARR came in at $465 million, with growth Accelerating to 48%. Management also increased the full-year 2022 ARR Guidance Range to  $589-$601 million, up from a prior estimate of $583.5-$598.5 million.

Over the past two years, the dramatic shift from brick-and-mortar shopping to e-commerce has been a tremendous obstacle for investors in malls and shopping centers. The demise of cornerstones like Sears and JCPenny hastened the decline as shopping malls are now left without anchor tenants.   Recent data suggests that 25% of America’s 1,000 malls will be closed in the next 3-5 years.  

Leading shopping mall REIT Simon Property (SPG) is struggling to pivot amid the inexorable decline of its core asset group. The REIT has been aggressive in diversifying into outlets and foreign real estate, which may help to hedge against increasingly substantial losses from their shopping mall category. But given current inflation and the possibility of an economic slowdown, both shoppers and retailers may be in a tight spot this holiday season which will inevitably weigh heavily on SPG.

Investors choose REIT stocks because of their income-producing abilities and yields. The fact that SPG is concentrated in brick and mortar retail is tangential to its income feature. Anyone looking for the reliable income that real estate and mortgage investments can bring would be wise to steer clear of Simon Property for now. 

Grab These 3 Leisure Tickers Before the Industry Takes OffLook Forward to Leisure!

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People are increasingly looking forward to more than just travel and “staycations” regarding how they spend their spare time. This is because of the increased growth recently seen in the leisure industry. Interactive teaching methods, mass customization, AI that supports cashless transactions, technological ecosystems, data, and machine learning insights, and augmented reality are some of the biggest trends branching out from tech and influencing the… leisure industry? Really? Yup.

Leisure and fitness-related attitudes are evolving at a global level. Many people who had never been motivated to exercise or stay active started taking regular walks and looking to satisfy their fitness needs during the pandemic. The need for recreation and exercise resources both at home and at work will dramatically expand as a result. The proportion of Americans 65 and older is expected to rise from 15% to 24% between 2018 and 2060, with growing demand for various forms of recreation and entertainment. 

I’ve considered track records of success, growth, analyst sentiment, and fundamentals. As the industry expands while prices are down, these leisure stocks come with strong buy ratings; Analysts agree that these tickers could be great opportunities:

Planet Fitness Inc (PLNT)

Planet Fitness, Inc. (PLNT) and its subsidiaries operate and license fitness facilities under a popular name in the fitness world. PLNT conducts operations in the U.S., Panama, Canada, Puerto Rico, Mexico, and Australia. PLNT sells exercise equipment to franchised establishments in the U.S. and Canada. PLNT was established in 1992 and is based in New Hampshire. PLNT announced that its franchisees and members had given more than $8 million to Boys & Girls Clubs of America since 2016, with $500,000 introduced to the fund just in October, made possible by PLNT’s charitable program, The Judgement Free Generation®, striving to eradicate bullying and encourage compassion among young people.

PLNT reported solid numbers for Q3, beating analysts’ projections for EPS and revenue by 11.37% and 4.18%, respectively. Let’s look at a few of PLNT’s impressive metrics, with year-over-year growth (alongside): Revenue of $229.81 million (+63.69%), a net income of $26.91 million (+54.29%), and EPS growth of 52.38%. For the current quarter, estimates show a current EPS of 47 cents per share and $270.7 millionPLNT’s stock is down 14.85% year-to-date, but the intrinsic value depends on who you ask. Analysts that offer yearly pricing estimates have given PLNT a consensus median price target of 90.00, with a high of 115.00 and a low of 72.00. This estimate shows a 16.69% increase from its last price, and the consensus also leans heavily on PLNT’s buy rating. Even stocks need exercise.

Pool Corporation (POOL)

Pool Corporation (POOL) sells swimming pool materials, equipment, and associated leisure items on a wholesale basis. POOL also provides non-discretionary pool maintenance items such as chemicals and replacement parts and discretionary products such as packaged pool kits. POOL’s selection includes a vast selection of residential and commercial irrigation parts and products, landscaping equipment, and other specialty products. POOL was created in 1993 and is based in Covington, Louisiana. Well-regarded for years as an industry leader, POOL offers over 200,000 items from over 2,200 suppliers to over 120,000 professional contract and store clients, with 70% of its transactions done in person. POOL’s scale allows it to spend on its supply chain, technology, and customer support to set itself apart. 

POOL brings in over 60% of its revenue from pool maintenance, giving it an expanding environment of recurring income as new pools are built each year. As of Q3 ‘22, POOL was/is working with a profit margin of 21.86%revenue of $6.12 billionEPS of $4.82 per share, and a Return on Equity margin of 72.07%. All the while, POOL’s stock is down year-to-date and is widely considered undervalued. Let’s not forget that POOL has a dividend yield of 1.27%, with an annual payout of $4.00 per share. Analysts who project 12-month pricing have given POOL a consensus median price target of 350.00, with a high of 420.00 and a low of 305.00. The estimate shows an 8.98% increase over current pricing, and POOL’s buy rating is something for investors with a large enough budget to consider.

Cedar Fair LP (FUN)

Cedar Fair, LP (FUN) owns and runs amusement parks, water parks, and resorts throughout the U.S. and Canada. FUN’s theme parks include Cedar Point in Sandusky, Ohio; Kings Island near Cincinnati; California’s Great America in Santa Clara; Canada’s Wonderland near Toronto; Worlds of Fun in Kansas City, Missouri; and two Schlitterbahn Waterpark locations —- one in New Braunfels, Texas and the other in Galveston, Texas. Established in 1983, FUN is based in Sandusky, Ohio.

FUN’s revenue hit a record $843 million, a 12% increase ($90 million) over the same period last year. Let’s look at critical year-over-year growth for FUN: Revenue +34.30%, Net Income +125.05%, EPS +125.38%, and Net Profit Margin growth of 101.12%FUN also offered a killer surprise for Q3– it reported an EPS of $5.86 vs. the $3.90 expected, an extraordinary margin of 50.53%FUN’s Board of Directors recently declared a quarterly cash dividend payout of $0.30 per unit ($1.20 per unit annually), with a 2.89% yield. Analysts who provide 12-month price predictions give FUN a median price target of 51.00, with a high of 58.00 and a low of 41.00. The estimate represents a 22.63% increase from its last price, and FUN has a strong buy rating that can arguably base itself on any number of market factors.

Read Next – BREAKING: Military to spend billions on “Living Missile”

In 2018, Secretary of Defense Jim Mattis drafted a top-secret plan called “Project Overmatch.”

It says that the weapons we have right now were designed to win wars in the 20th century.

But to “Overmatch” our enemies in the 21st Century, we’re going to need 21st century weapons.

Now here’s what most people don’t know.

“Project Overmatch” just received final approval to be implemented in March.

That’s given the Pentagon an extra $37.2 billion to spend on adding next generation weapons over the next 12 months.

At the center of all this spending is a new “living missile.”

CBS News Reports:“It’s an entirely new type of weapon.”

The NY Times Reports:“No existing defense can stop it.”

And the U.S. Army said, “We’re going to make a lot of them very quickly.”

We’ve just prepared a new report on the small defense contractor that makes this weapon – plus three other small defense firms best positioned to ride this mega-trend…

Please take a few seconds and download a pdf copy right now before the report link expires…

GET: “21st Century Battlefield: 4 Companies Changing Warfare” >>>

Earn Gold Mine Royalties Just By Holding These Stocks

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Investing in precious metals often seems to be reduced to two options. You can either buy physical gold/silver – the more straightforward, less risky option but often with the lowest returns, or invest in specific mining companies – which requires significant research and generally carries more risk.

But there is another option that often goes overlooked– royalty companies. On the spectrum of risk for precious metal investing, royalty companies fall somewhere between metal and miner. But when it comes to returns, gold royalty companies have been outperforming for quite some time.

Over the past seven years, royalty and streaming companies have significantly outperformed in both bull and bear markets. An index of five central precious metals royalty and streaming companies vastly outperformed gold and the GDX over the past seven years with a return of 128% versus gold’s return of 47% and the GDX’s return of 51%.  

In this article, we’ll explain how precious metals royalty investments work and discuss some of the most desirable tickers in the group.  

So what is a royalty company? A royalty company provides funding to the mining company for the tremendously expensive task of building a mine. Once the mine is producing, the royalty company receives a percentage of that production at a predetermined price or a share of the profit after the gold is sold.  

Since the prices for mining output are already set, royalty companies can still make money even when gold prices are falling. Plus, they don’t participate in the operations of the mines themselves, so royalty companies don’t have to deal with the burden of operating costs and therefore take on much lower levels of debt than producers.

Royalty companies also can pick and choose their projects and typically hold a diversified portfolio which minimizes concentration risk. If things take a turn for the worse with one project, the company usually has several more to fall back on. Plus, dividends of royalty companies are much more consistent and less affected by precious metal price movements compared to mining companies.  

Royalty and streaming companies’ unique business model supports miners and produces cash flow, offering investors stability and returns even during gold price downturns. This is possible thanks to high-profit margins and exposure to a diversified investment portfolio with built-in upside. Without further ado, here are a few of the best precious metal royalty investment opportunities currently available.  

Franco-Nevada Corp. (NYSE: FNV) is a gold-focused royalty company with additional interests in silver, platinum, oil, and other resource assets. They have a diversified portfolio of 112 producing assets, 42 advanced assets (not yet producing), and 250 exploration-stage mining properties. FNV generates around 91% of revenues from the Americas and 9% from the rest of the world and has invested $314 million in acquisitions in 2022.  

With a global recession seemingly on the horizon, it’s a comfort to shareholders that FNV has zero debt, $2 billion in available capital, and is generating operating cash flow at a rate of $1 billion per year. Thanks to its low-risk/high-margin business model, it’s also largely immune to cost inflation. 

Franco-Nevada actively manages its portfolio to maintain a diversity of revenue sources. However, the majority of its stakes are still in gold. In Q3, 77% of revenues were earned from precious metals, with the other 23% mostly coming from energy assets. More than 75% of revenue is expected to come from precious metals through 2025.  

FNV stock has gained 17% over the past month, and the pros think this is just the beginning. A median price target of $161 represents a 12% upside from the current price.   The stock trades at a premium, with a forward P/E ratio of 38, and comes along with a 0.89% annual dividend.

Canada-based Elemental Royalties (CVE: ELE) is an exceptional ground-floor opportunity in the royalties space with operations in the U.S., Australia, Africa, and South America. The emerging royalty company has acquired 12 royalties since 2017, including three gold royalties acquired in 2022 to the tune of $47.5M.

An investment in Elemental Royalties is an opportunity to invest in high-quality royalties with exciting growth prospects. ELE’s royalties are uncapped, and no buyback options exist, so there are fewer limitations to the company’s performance. 

It’s one of the most attractively priced precious metals royalty companies available with a trailing twelve-month price-to-revenue ratio of just 8, compared to peers like Metalla Royalty (NYSE: MTA), which currently trades at 89 times its revenue. As of Wednesday’s close, ELE traded at just CAD 1.25 per share.  

Royalty Gold (NYSE: RGLD) is one of the world’s leading precious metals royalty companies. The Denver-based company holds 186 properties on five continents, including interests in 41 producing mines and 20 development-stage projects in some of the world’s most prolific mining regions in North America, South America, and Africa.  

The company’s proven business model generates strong cash flow and high margins with a low-cost structure. As a result, RGLD’s solid balance sheet and access to liquidity provide the cash to finance these acquisitions without equity dilution in 2022. Last year,  Royal Gold reported an operating cash flow of $407.2 million, closing the year debt free, with net cash of $222 million and available liquidity of $1.2 billion.  

Prospective investors with a long-term outlook should appreciate RGLD’s position as a sector leader when it comes to raising its dividend. In November 2021, the firm earned its inclusion as the first and only precious metals company in the S&P High Yield Dividend Aristocrats Index after 25 consecutive years of raising its dividend. Currently, investors enjoy a 1.35% annual yield.

Three Stocks to Watch for the Week of November 28th

The major indices inched higher for the holiday-shortened week as FOMC meeting minutes fueled optimism that the Fed may soon begin to ramp down from the historically significant 0.75% rate hikes it has implemented in the past four consecutive meetings. A “substantial majority of participants” thought that a slowdown “would likely soon be appropriate,” according to the minutes from the Fed’s mid-November meeting, released Wednesday. The Dow gained 1.7%, the Nasdaq rose 0.7%, and the S&P 500 climbed 1.5% for the week, finishing above the 4,000 level for the first time in two months. As of Friday’s close, the S&P 500 has risen 12% from its recent mid-October low.  

This week, the labor market will be in the spotlight with October’s Job Openings and Labor Turnover Survey (JOLTS) and ADP’s National Employment Report for November due for Release on Wednesday. Then on Friday, the Bureau of Labor Statistics will release its nonfarm payrolls report for November. Market watchers will get clarity on how inflation is affecting U.S. consumer spending with PCE data due out on Thursday. We’ll also find out if the U.S. housing market continued to cool in September with the release of S&P Global’s Case-Shiller National Home Price Index, slated for Tuesday. 

Our team has three stock recommendations for the week ahead, the first of which may not come as a surprise, considering its strong performance this year. What is surprising is that this historically recession-resistant ticker is still so cheap. 

It should be no surprise that the defense giant  Lockheed Martin (LMT) has outperformed the market this year. There are obvious geopolitical implications with the war in Ukraine. When Russia decided to invade its neighbor, both U.S. and European forces rushed in to help Ukraine. It may be some time before LMT stock pops again, as it did at the onset of Russia’s invasion of Ukraine. However, its order books are likely to improve due to rising defense budgets in the U.S. and abroad. Along with Lockheed providing support to Ukrainian resistance fighters, the looming uncertainties in Russia could lead to massive economic problems and gaps in power in the former Soviet Union-controlled areas. 

Given the recession-proof nature of defense contracting, Lockheed Martin should continue reporting positive results and rewarding shareholders through its quarterly 2.7% forward yield. In other words, LMT will likely stand firm even if the market dives again. The company runs a P/E ratio of 24 times, below the sector median of 28.3 times. As well, LMT features excellent longer-term growth and profitability metrics.

Global healthcare leader Eli Lilly And Company (LLY) has been creating high-quality medicines for over a century. The drug firm focuses on endocrinology, oncology, neuroscience, and immunology. Key products include Trulicity, Jardiance, Humalog, and Humulin for diabetes; Taltz and Olumiant for immunology; and Verzenio and Alimta for cancer.  

In September, Lilly’s immunology drug Olumiant received emergency use authorization from the FDA to treat hospitalized COVID-19 patients. Moreover, the drug has produced impressive results from phase 3 trials examining Olumiant’s efficacy as a hair loss treatment.   

The mega-cap pharmaceutical giant’s pipeline is locked and loaded with promising advancements, which means plenty of potential upcoming opportunities for investors to benefit from. In the first half of 2021, Lilly increased research and development spending for its up-and-coming treatment for diabetes Tirzepatide by 21% to $3.36 billion. The drug is currently in phase three trials and has already proven to be more effective than competitors.

Berenberg Analyst Herry Holford recently upgraded Eli Lilly to Buy from Hold and raised the price target from $240 to $270. “Pipeline progress has effectively locked in Eli Lilly’s long-term sales growth, which now stands at 10% annually through 2030 versus a peer average of 4%,” Holford tells investors in a research note. The analyst says a “confluence of catalysts, superior growth, and superior returns” on Research and development, compounded by the recent pullback in the stock, prompts a revisit to the investment thesis.  

The board of directors at Eli Lilly declared a fourth-quarter dividend of $0.85. LLY’s dividend payout for the year is set for the low 40% range, which should allow for robust future dividend growth.

A strong pipeline and a stable dividend make Eli Lilly an attractive consideration. The pros on Wall Street also think so. Among 17 polled analysts, 12 say to Buy LLY, 4 call it a Hold, and only 1 rates the stock a Sell. A median 12-month price target of $279 represents a 12.6% increase from its current price.

Pioneer Natural Resources Company (PXD) has long viewed sustainability as a balance of economic growth, environmental stewardship, and social responsibility. Its emphasis is on developing natural resources in a manner that protects surrounding communities and preserves the environment.

In the wake of the pandemic, when energy prices were low, PXD struck an almost perfectly timed agreement to buy fellow Permian Basin producer Parsley Energy for $4.5 billion. If you’re wondering how PXD managed to finance that transaction, the answer lies in the fact that it was an all-stock deal that ensured Pioneer didn’t have a new giant debt load hanging over its head. The fact that Parsley operated primarily in the same region of West Texas, where Pioneer had both expertise and existing staff, has paid off over time.   

That deal was a coup for Pioneer shareholders, built on the fact it was large and well-capitalized at a time when stressed and debt-reliant shale plays were looking for a white knight. On top of that acquisition, PXD also boosted its dividend by 25% at the start of the year as further evidence of its strong balance sheet.

Investors can look forward to upcoming tailwinds, including Pioneer’s recently announced partnership with the world’s largest renewable energy producer, NextEraEnergy (NEE), to develop a 140-megawatt wind generation facility on Pioneer-owned land. The project will supply the company’s Permian Basin operations with low-cost, renewable power and is expected to be operational next year.  

In the third quarter, revenue was up 22% YOY to $6.09 billion, smashing the consensus estimate of 4.57 billion. The company reported earnings of $7.48 per share, beating consensus expectations of $7.27 per share. So far, in 2022, the company has rewarded its investors handsomely with $20.73 per share through its generous 10.78% cash dividend. Even after gaining 30% this year, Pioneer shares likely still have valuation upside in addition to their tremendous dividend income potential.   

Three Stocks to Avoid Next Week

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Seeking out great stocks to buy is important, but many would say it’s even more essential to know which stocks to steer clear of. A losing stock can eat away at your precious long-term returns. So, determining which stocks to trim or eliminate is essential for proper portfolio maintenance.  

Even the best gardens need pruning, and our team has spotted a few stocks that seem like prime candidates for selling or avoiding. Continue reading to find out which three stocks our team is staying away from this week. 

While the future remains bright for renewable energy, not all solar stocks are a buy. Provider of solar engineering and construction services, iSun Inc. (ISUN), has seen operating losses skyrocket alongside revenue increases in recent years.  

iSun reported third-quarter 2022 revenue of $19 million, representing a 185% increase over the same period in 2021. Alongside top-line growth over the past year, the company has reported $22 million in operating losses. Operating income in the third quarter was a loss of $4.9 million compared to a loss of $1.6 million over the same period in 2021. YTD operating income was a loss of $16.2 million compared to a loss of $7 million during the same period in 2021.

Given the company’s already high debt position after a series of acquisitions in 2021, the additional losses could force it to raise equity to de-lever its balance sheet, which could mean further declines for iSun.  

The small, unprofitable solar company’s stock is down 76% over the past 12 months, but it’s far from a bargain considering the risk factor.  

The dramatic shift from brick-and-mortar shopping to e-commerce over the past two years has been a tremendous obstacle for investors in retail. With interest rates marching higher as the economy slows, this is likely just the beginning of the pain for retailers.  

Recent data suggests that 25% of America’s 1,000 malls will be closed in the next 3-5 years. As a cornerstone of shopping malls across the country, department store chain Macy’s (M) has been among the stocks to suffer. Over the past twelve months, M stock has declined 36% to trade at $22.23 a share.     

Although Macy’s delivered a strong third-quarter report along with an increase to its earnings outlook, there are obstacles ahead for the iconic retailer. With the Federal Funds Rate at its highest level since 2008 and no sign of slowing down, the consumer economy faces unprecedented challenges. While anyone left holding M stock could enjoy a holiday bump, in the face of a looming recession, any increase seems likely to be short-lived. 

There’s no question that electric vehicles are the future, but investors looking for bargains amid the market meltdown would be wise to steer clear of third-party companies specializing in EV charging stations like Blink Charging (BLNK). It’s much too soon to predict winners in this cutthroat niche of the EV industry, mainly because it’s still unclear if third-party charging kiosks will ever be profitable.  

Analysts don’t see Blink becoming profitable before 2026. By then, the company will likely be looking at a much different landscape – a lot can change in three years. From the current vantage point, the near future looks murky for the entire EV industry, considering the massive layoffs that have occurred this year amid supply chain pressure and production restrictions in China.  

Blink Charging shares have fallen 82% since peaking in early 2021 and are 61% lower year-to-date, but the stock is still trading at 19 times, trailing twelve-month revenue. For perspective, the price-to-sales ratio for the S&P 500 index as of November 1 was roughly 2.5. And this was also way higher than what the ratio has been historically. The current consensus is to Hold Blink stock. We’ll stick to the sidelines on third-party EV charging companies until EV industry headwinds subside.  

Three Network Security stocks to Consider

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One of the biggest threats to corporate America is ransomware. The growing possibility of losing access to essential or confidential digital property is a nightmarish scenario for executives, as the financial consequences can be enormous.  

But it’s not just major companies that are at risk. We are all threatened with the loss of personal data security as hackers continue to develop new ways to exploit networks, software, and the array of evolving technology services. As the world advances to become more digitized, so too do its threats.

According to Research and Markets, the global network security market size reached a valuation of $4.68 billion in 2021. Experts project that by 2027, the segment will command a valuation of $16.6 billion, representing a CAGR of 23.5% from 2023 estimates.

Online security is a young, quickly evolving industry. Competition is heavy in the space, and demand continues to grow faster in both volume and complexity. Not all companies from the burgeoning subsector are set to last. In this article, our team examines three attractive tickers set to benefit as the demand for protection from cyber abuse continues to grow.

Palo Alto Network Inc. (PANW) is a top choice for customers looking to stay ahead of quickly evolving cybersecurity threats. For ten years straight, the company has been named a market leader in network firewalls by leading research and advisory company Gartner. In fact, it achieved the highest position for ability to execute and the furthest position for completeness of vision in Gartner’s Magic Quadrant for Network Firewalls for 2021. Still, they haven’t been letting the recognition go to their head. Over the past few years, Palo Alto has been aggressively expanding its portfolio with big investments and acquisitions.    

The groundbreaking acquisition of Bridgecrew, a developer-first cloud security company, enabled Palo Alto’s Prisma Cloud to become the first cloud security platform to deliver security across the entire lifecycle of an application, from the building stage to deployment to run. This is the most recent in a string of additions to its portfolio of NGS (next-generation security) services.

In fiscal 2021, Palo Alto’s NGS services generated $1.18 billion in annual recurring revenue (ARR), representing roughly 28% of its top line and surpassing its prior ARR guidance of $1.15 billion. That segment’s accelerating growth complemented the stable development of its on-site appliances and services, and its total revenue increased by 25% for the full year. 

Palo Alto serves more than 85,000 customers today, compared to about 9,000 customers nine years ago. The company expects its revenue to rise 24%-25% in fiscal 2022, and its stock trades at about fifteen times that forecast. Down 18% from its April high, PANW may be a solid choice to add to your portfolio. 

The undisputed global leader in identity security, CyberArk (CYBR), has been gaining attention on Wall Street. The stock is up 12% over the past six months and could continue to gain heading into 2023. Regardless of any short-term earnings volatility, the potential for long-term, steady growth is too great to ignore.  

CyberArk’s innovations occur across its self-hosted solutions and expanding SaaS portfolio of privileged access management, secrets management, and cloud privilege security offerings, helping its customers enable “Zero Trust” by enforcing least privilege. Under the framework of its Zero Trust approach, its teams can focus on identifying, isolating, and stopping threats from compromising identities and gaining privilege before they can do harm.

The Israel-based company was recently named a leader in the Gartner Magic Quadrant for Privileged Access Management for 2021. It was awarded both highest in ability to execute and furthest in completeness of vision for the fourth time in a row. It comes as no surprise the business has been attracting customers to its subscription-based services, which means tremendously reliable cash flow, a good sign for anyone eyeing the small-cap.  

For its third quarter, CyberArk reported a 133% growth acceleration from the previous year’s quarter of the subscription portion of its annual recurring revenue (ARR) to $255 million. Total ARR came in at $465 million, with growth Accelerating to 48%. Management also increased the full-year 2022 ARR Guidance Range to  $589-$601 million, up from a prior estimate of $583.5-$598.5 million.

According to Mordor Intelligence, the application delivery controller market is expected to reach a valuation of $3.78 billion by 2026, representing a CAGR of 9.63%. One of the companies set to benefit most from the trend is A10 Networks (ATEN). Specialists, when it comes to the manufacturing of application delivery controllers, A10 leverages artificial intelligence protocols to provide automated protection against distributed denial-of-service (DDoS) attacks, which are increasing in relevance by the day.  

Widening profit margins surfaced in the most recent quarterly results as earnings expanded faster than revenues. Second-quarter earnings came in at $0.20 per share, surpassing the consensus estimate of $0.18. Revenues were also upbeat at $72.1 million, representing a 10% increase from the same period last year and exceeding analyst expectations of $$71.02 million.

A10 is consistently achieving revenue and EPS targets despite a variety of macro headwinds in all regions. This demonstrates robust demand for our proprietary security-led solutions, disciplined execution, and a focus on diversification that drives sustainability. We have positioned our business to avoid concentration in any single geography, any specific customer type, or any isolated product offering, and this diversification enables consistent execution despite economic, supply chain, and geopolitical challenges. Customer-centric technical innovation, global commercial execution, and focus on driving the business model are bolstering our sustainability and driving continued success,” said Dhrupad Trivedi, President, and CEO of A10 Networks.

The drastic earnings growth indicates the business is going from strength to strength. A trend that investors hope will continue well into the future. Management reiterated its full-year top-line growth target of 10 – 12% and expanding EBITDA in the range of 26 – 28% of revenue. A10 Networks certainly ticks a few boxes on the list of desirable qualities and seems well worth watching.

Three Marijuana Stocks That Will Likely Do Well During a Recession

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 In 2017 and  2018, investors piled into cannabis stocks as word spread of the “next big thing.”  Canada made global history when it became the second country in the world and the first G7 nation to legalize cannabis federally. Emerging players spoke of big plans, which stoked investor enthusiasm. Amid the initial excitement, legislative progress was slow, and competition in the stifled marketplace kept prices low. By April 2019, early-stage growth hiccups caused share prices to change direction, and since then, the vast majority of pot stocks have seen a 50% decline in value.

37 U.S. states and four U.S. territories have laws that permit the use of marijuana. While it is still  illegal on a Federal level, President Biden’s proclamation on October 7th included a request for the attorney general “to initiate the administrative process to review expeditiously how marijuana is scheduled under federal law.”  Many see this as a significant step in the right direction, but it’s expected to be a slow road.    

The cannabis industry may not have been the explosive growth opportunity that early investors had anticipated, but there is still tremendous long-term upside, as more states jump on the bandwagon of legalizing recreational marijuana use.  A recent study showed that those who engage with marijuana consider it a secondary necessity. In other words, consumers will likely find other things to cut out of their budget if needed, making the demand for marijuana products virtually recession-proof. Plus, the correlation between the performance of marijuana stocks and the overall market is lower, which makes them helpful portfolio diversifiers.  

Along with the possibility of tremendous upside opportunity, uncertainty is there. No one can predict when significant legislative changes will occur or how taxation will affect costs. Stock selection is critical in the Marijuana space. Investors should look for competitive companies with the liquidity to sustain themselves. In this list our team takes a look at three cannabis stocks that seem likely to weather a recession.

The potential legalization of cannabis is likely to be a major positive catalyst for the leader in net cannabis revenue, Tilray (TLRY). The company has a presence in all key markets, with a focus on recreational and medicinal cannabis; the addressable market is significant and expanding. 

TLRY surged following the recent announcement that President Biden would encourage the reassessment of marijuana laws but gave back some of those gains when the company reported Q1 2023 revenue and EPS misses. The company has its sights set on Revenue of $4 billion by 2024, a realistic target if regulatory hurdles wane. At $3.72 per share, TLRY currently trades at -6.5x forward earnings.   The stock remains deeply oversold and is worth buying even after the recent uptick.

As long as marijuana remains illegal at the federal level, access to credit markets for pot companies will be spotty at best. Marijuana-focused real estate investment trust Innovative Industrial Properties (IIPR) buys medical marijuana cultivation and processing facilities in legalized states with cash and leases these properties back to the seller. It’s a win-win agreement that provides cash to cannabis companies while netting IIP long-term tenants.

IIPR provides investors ground floor access to exponential growth potential along with the reliability of a REIT. As of early September, Innovative Industrial Properties owned 111 properties covering 8.7 million square feet of space in 19 states. Moreover, 99% of its tenants were on time with their rent as of the end of June. Over the past five years, IIPR’s quarterly payout has grown by 1,100%. The REIT currently boasts a 6.61% yield.

Trulieve Cannabis (TCNNF) stands out as one of the few cannabis companies that have been able to turn a steady, meaningful profit, with four years of consistent quarterly profitability under its belt. That is, until its most recent quarter, when the company reported a net loss on the bottom line of $22.5  million, compared to the net income of $40.9 million reported for the previous year’s quarter. However, much of the loss can be attributed to one-time charges related to Trulieve’s recent acquisition of Harvest & Recreation Health. The quarterly net loss came in at around $1.1 million without the one-time charges.  

While the company’s recent loss might be looked at as a step in the wrong direction, it’s common to see this following a major acquisition. Trulieve’s cannabis revenue has been following a steady upward trajectory since well before the acquisition took place. During the second quarter, Revenue increased by 49% year over year to $320.3 million. 

The company has been steadily expanding operations, nearly tripling in size over the past few years. Since June of 2020, when it had just 52 dispensaries, all located in the state of Florida, the company operates 177 market-leading dispensaries throughout 11 states. It has successfully done so to preserve its position as a major player in this increasingly competitive market. Trulieve Cannabis garners a 100% Buy rating from the 18 analysts offering recommendations. A median price target of $28.71 represents a 169.62% upside. TCNNF stands as potentially one of the best picks to profit from the cannabis opportunity.

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