Over the last month, I believe I’ve made some good subsidiary acquisitions.
IIPR
First, I added more Innovative Industrial Properties, Inc. (IIPR). I look at this more from the real estate and assets perspective rather than just as a medical marijuana industry company investment. The company only had about $450M in debt on its balance sheet, but almost $2.4B in assets. The company is bringing in about $310M in revenue from its rentals, and has net income of $163M.
As of today, the company is trading with about a $2.1B market cap.
Just from a business perspective, if the company can continue to net $163M a year, it could easily be debt free, if it wants. Plus, it is currently yielding over 10%. With such low debt, I also consider the risks to be low. Of course, no one can predict the medical marijuana industry, so there could be more downside, if things don’t work out. But, IIPR appears good to me if things remain stable, and there’s a nice upside if the industry gets better.
PZZA
I added Papa John’s International, Inc. (PZZA) because everyone knows this name. The company is currently trading with a market cap of $1.25B and it’s down 46% over the last year. Although, I acknowledge that this can drop down even more, I believe there’s a good chance that things could turn around.
CROX
I look at Crocs, Inc. (CROX) as a real premium company, trading at a discount. Market cap is $5.44B, but net income was $834M. Even taking all of the possible tariffs and sourcing risks into consideration, I believe this is a good risk/benefit investment.
BGS
I have owned B&G, Foods Inc. (BGS) for some time in the past. It is dropping and continues to drop even more as I write this. I have added even more. The market cap is currently $460M. The company is losing money, but has a high dividend of 13%, which I already have anticipated will likely not stay in place.
Insiders are buying, and for this company, that has influenced me. This company is cheaper than it has been in over a decade. I just can’t fathom things not turning around for this company, with iconic brands like Green Giant, Crisco, Bear Creek, Skinnygirl, Cream of Wheat, Dash, Ortega, Crockpot, Mama Marys, and others! I am a proud and encouraged owner.
WBA
We all know Walgreens. Unbelievably low priced and undervalued. Yes, there are risks. But, I added more. I plan to talk more about Walgreen’s at a later point.
AISP
Lastly, my most exciting subsidiary addition, I added to my growth portfolio, Airship AI Holdings, Inc. (AISP). I bought a nice sized position and it immediately performed well for me. I was really fortunate. I bought last week, and already the value has increased over 40%. Of course, there is no way I could have predicted that.
Over that last year the company has increased almost 250% and has a current market cap of $190M. This is a young company, and already it is profitable, and with the future of AI, the sky is the limit as to how high this could climb.
ADM and REYN
I really like both Acher-Daniels-Midland Company (ADM) and Reynolds Consumer Products, Inc. (REYN). My analysis shows that they are both undervalued, but I wasn’t convinced to buy full positions. I decided to enter option contracts for the number of shares that I actually wanted to buy, just to save myself some time in making the decision. As of now, it appears to have been a good choice, because they both are marginally up since I bought the options last week. However, I understand the risks and will evaluate my use of options in the future.
I have asked myself, if I would be better served by just buying the actual shares of the company with the cost of the option premiums rather than buying options and paying the premium, which I could totally lose. If I bought the actual stocks, I would own the shares and could not lose until I decided to sale at a lose. But options, on the other hand, could expire worthless at the set date. Plus, I had no catalyst for buying or thinking the shares would mature based on a particular event happening by a set date.
My stock option policy and analysis for myself is still “work in-progress”. I bought call options of ADM and REYN, which based on my past experience, I am more likely to lose money with the call options, if I don’t sale at the right time. My experience has taught me that I usually earn money if I sale options, although it usually takes a longer time to profit and the gains are modest at best.
But, as of now, I bought the call options for both ADM and REYN. We will see how things go.
Leave me a comment if you have any thoughts. One of the reasons I started this blog is to hold myself accountable for my buys and sales, as well as to allow you to follow the decisions I make, both good and bad.
Leave me your thoughts! Thanks!