Editors Note:

The market spike on Monday did not cover all stocks. Dividend stocks fell hard. The theory is that a rising equity market means higher returns than slow growing dividend stocks.


HCN - Welltower Inc - Company Profile

Welltower Inc. is an independent equity real estate investment trust. The firm engages in acquiring, planning, developing, managing, repositioning and monetizing of real estate assets. It primarily invests in the real estate markets of the United States. The firm primarily invests in senior living and health care properties. It invests across the full spectrum of health care real estate, including senior living communities, medical office buildings, inpatient and outpatient medical centers and life science facilities. The firm conducts in-house research to make its investments. It was formerly known as Health Care REIT, Inc. Welltower Inc. was founded in 1970 and is based in Toledo, Ohio with additional offices in Brentwood, Tennessee and Dallas, Texas. Company description from FinViz.com.

The REIT stocks have been in a strong uptrend over the last several months on expectations for the market to correct when/if President Trumps policies failed to be implemented. The tax reform, infrastructure spending, health care reform, etc are all fraught with months of complicated negotiating in the House and Senate. Once equity investors realize tax reform may not happen until 2018 the market is likely to crash.

Add in the geopolitical risk with Syria and North Korea and these REITs were a flight to safety play. They crashed on Monday as investors jumped into other equities or simply cashed out to cover losses in their shorts.

I believe the future remains bright for the REITs. There is likely to be some challenges for the broader market over the next several months and they will become a safe haven once again.

Earnings May 24th.

One other benefit to the REITs is that the options are cheap because they do not move fast. They move slowly without a lot of volatility. If I am wrong in my assumption we will not have much premium at risk.

Buy June $72.50 call, currently $1.65, initial stop loss $70.85.


No New Bearish Plays