We're Calling Up This Aging Population Play After Fed Policy Shift

Symbol	Transaction Type	# Shares Traded	Recent Price $	Shares Owned After Trade	% Portfolio
BROS	Buy	333	$58.75	3,258	3.5%
OLED	Buy	90	$135.50	1,478	3.7%
WELL	Buy	330	$166	330	1.0%

After you receive this alert, we will make the following trades:

Buy 333 shares of Dutch Bros BROS at or near $58.75. Following the trade, the Portfolio will own 3,258 BROS shares, roughly 3.5% of the Portfolio’s assets.

Buy 90 shares of Universal Display OLED at or near $135.50. Following the trade, the Portfolio will own 1,478 OLED shares, roughly 3.7% of the Portfolio.

Buy 330 shares of Welltower WELL at or near $166. This is a new position for the Portfolio, and it will account for 1.0% of the Portfolio’s assets.

Acting on Our Shopping List

With the Federal Reserve’s monetary policy decision and the market having digested prospects for fewer rate cuts in the coming quarters than it expected, but still one more than the Fed previously telegraphed, we are putting some additional capital to work in the shares of Dutch Bros and Universal Display.

The move with BROS shares comes as they look to close the gap seen in the chart, with the sweetener being that this move is at price levels below our last one in late July. Our focus remains on the ongoing geographic expansion that has been a time-tested strategy for similar companies. As the Fed moves toward less restrictive policy in the coming months, that should help deliver project hurdle rates, potentially speeding up the company’s expansion plans.

With OLED shares, we are incrementally reducing our position cost basis, taking advantage of the latest bout of pressure on the shares. While we recognize this has been a frustrating position for some, the overwhelming preponderance of data points to the accelerating adoption of organic light-emitting diode displays and in increasingly larger formats for the smartphone market. We see that accelerating as more foldable products come to market in the next year, and long-term, the development of blue rounds out red and green, paving the way for the eventual general illumination market (white) — just like we saw with LEDs.

As we make these moves, we will reset our panic points accordingly to $48 from $50 for BROS shares and $120 for OLED from $135. Given the beta levels for both stocks, we are purposely leaving some extra room with these panic points, but as the shares move up, we will adjust them accordingly.

Calling up Welltower Shares

We are following up on our recent review of Welltower shares and establishing a $190 price target as we call them up to the Portfolio from the Bullpen.

Given the upside to our price target, we are starting the position with a Two rating. Should WELL shares either fall back to support near the 100-day moving average, near $157, or if the company can achieve stronger-than-expected margin gains that drive faster net operating income (NOI) and funds from operations (FFO), prompting us to revisit our price target, we would look to reconsider our initial rating for the shares. A pullback to that $157 level would also see us become more aggressive in the shares.

As we discussed in prior alerts, we favor Welltower over other players in the senior housing and assisted living space, given the greater portion of its revenue stream stemming from resident fees and services. According to the U.S. census, the 80-year-old-plus population will increase to 14.7 million people (3.4%) in 2025 alone. The growth of the senior population will continue its increase from this year’s figures, growing by 16.6% by 2028 and by almost 28% by 2030. As this demographic shift unfolds, we should see a relatively steady growth rate in Welltower’s revenue, NOI, and FFO, which in turn, given its REIT status, should drive its payable dividend stream higher.

Because of the favorable demographic tailwind and lower interest rate path that should reduce construction costs over time, as well as bring REIT stocks back into favor, our intent is to be long-term holders of WELL shares. Our plan will be to build the position size methodically, increasing the Portfolio’s dividend stream along the way.

As we make this initial move with WELL shares, we will set an initial panic point at $141, but lift that as the shares move higher.

Note

Given the potential movement in the market on Thursday morning, we will post the prices for these trades in the Comment section below once they are executed.

More Pro Portfolio

(Please note that we are looking to execute these trades at or near the share price mentioned above. Once the trade is completed, subscribers can see the trade's executed price here. Be sure to toggle the chart to sort by Purchase Date.)

At the time of publication, TheStreet Pro Portfolio was long BROS and OLED.