The Post-Cut Play You Have to Make Today

VIEW IN BROWSER

BY JASON BODNER, EDITOR, QUANTUM EDGE PRO

The Fed cut rates yesterday… and nobody cared.

The first rate cut since last December, a 25-basis point move from the Fed, might be at the top of the headlines today.

Stocks, however, hardly moved a muscle.

The reason?

Big Money has been front-running this move for weeks now.

My Quantum Edge system shows institutions have been amping up their buying pressure since Aug. 14. My Big Money Index tracks these flows, and it turned higher in mid-August as buy signals significantly outnumbered sell signals.

Source: MoneyFlows.com

They knew this move was coming and have been riding the market higher into this highly anticipated event.

Just as important as whether the money is flowing, though, is where.

And right now, it’s definitively going into areas of the market that do best when rates are falling.

If Big Money got a head start on you, it’s not too late to catch up.

We have a market not only defying seasonal weakness but also laying the foundation for a bigger and longer rally. And Big Money should get even more active both as we get into the fourth quarter.

But it’s not just the Big Money… it’s the small money, too.

A record $7.4 trillion is sitting in money market funds, earning decades-high yields:

That’s an increase of nearly 50% in just five years.

As rates fall, yields on those accounts will diminish… forcing investors to see bigger returns.

A chunk of that money should start flowing into stocks. Especially dividend stocks. And one of the best areas of the market to find great dividend stocks right now is real estate – specifically Real Estate Investment Trusts (REITs).

REITs were created to give regular investors a chance in what was once the province of institutions and the ultra-wealthy. REITs must return at least 90% of their taxable income to investors as dividends, resulting in an average yield right around 4%.

Recommended Link

History-Making Stocks Rarely Make Headlines.

While Nvidia makes all the headlines, this little-known company is already beginning to surpass Nvidia’s stock gains this year as data center growth surges. I believe this stock could soar in the next 12-24 months, potentially leaving Nvidia in the dust. I want to give you the name, ticker and my full analysis today – because I know you certainly won’t hear about this stock in the mainstream financial media. Click here to get all the details…

It’s worth noting that after yesterday’s rate cut, this average yield is in direct competition with the Fed’s risk-free rate.

The key difference is that REITs can also go up… providing capital gains on top of strong income. And they have been… a lot lately.

So it’s highly likely that tens, even hundreds of billions in sidelined cash could find its way into REITs.

As you would expect, specific yields can vary widely, so it pays – literally – to focus on the best in the strongest real estate sectors.

With that said, here are the three highest-rated REITs in my Quantum Edge system.

#1 CareTrust (CTRE)

CareTrust (CTRE) is a healthcare REIT that owns, buys, develops, and leases skilled nursing, assisted living, and independent living facilities. It has more than 500 properties in 34 states and the United Kingdom.

REITs go through the same quantitative analysis that stocks do, and I look for the same criteria that’s best predictive of future prices. CTRE hits all the marks, starting with its overall Quantum Score of 93.1, which is solidly in our buy zone.

Source: TradeSmith Finance

The fundamentals are strong at 90. Revenue increased 36% last year with analysts expecting another 40% in 2025. Earnings, which are called “funds from operations” (FFO) for REITs, grew 67.4% last year and are forecast to grow 20% in 2025.

The technicals are slightly stronger with the moving averages stacked in an uptrend and shares trading near 3-month and 1-year highs.

And while Big Money has been quieter over the last month or so, I see 13 unusually heavy inflow signals after the April 8 lows (and even one right before), with 12 of those coming between June 18 and Aug. 15 when shares rose 15%.

Source: MoneyFlows.com

CTRE yields a nice 3.9%, and the company’s strong financials make payout increases likely. In fact, CareTrust has raised its dividend every year since the REIT was founded in 2014.

With the U.S. population aging, CTRE is also positioned for long-term growth amid increasing demand for its facilities and the care offered at them.

#2 Welltower (WELL)

Welltower (WELL) is similar to CareTrust but bigger. It is an S&P 500 company with a $110.5 billion market cap, which is nearly 15 times that of CareTrust. It has more than 1,500 senior and wellness housing communities in the U.S., U.K., and Canada.

It ranks similarly to CTRE with its Quantum Score a tad lower at 91.1.

Source: TradeSmith Finance

That 91.1 still puts it in the buy zone, but the fundamentals drop off from CTRE into the mid-80s. They are what you might call a solid B.

Revenue grew 20.3% last year with expectations for beefier 29.3% growth this year, while FFO grew 18.7% in 2024, and analysts forecast another 18.4% increase this year.

The Fundamental Score is hurt by Welltower’s debt at 52.4% of equity. That’s not crazy high, but something to be aware of. And lower interest rates do raise the possibility of refinancing for lower debt payments.

The technicals rate the same, with shares trading in an uptrend and near their 3-month and 1-year highs. Internal metrics like stochastics and relative strength are also strong.

Big Money hasn’t exactly gobbled up shares like my kids eat pizza, but the institutions have consistently bought over the last 12 months with 10 buy signals here in 2025 after four in the last quarter of 2024.

Source: MoneyFlows.com

WELL has gained 32% in 2025, slightly ahead of CTRE, and capital gains may be more of the bet here. Shares yield 1.8%, which is obviously a lot lower than CTRE, and haven’t risen as consistently through the years.

#3 EPR Properties (EPR)

EPR Properties (EPR) calls itself “the leading experiential real estate investment trust,” meaning it focuses on experience-related properties. This is another prominent trend with Baby Boomers downsizing and younger generations valuing experiences over things.

EPR has 329 locations in 43 states as well as Canada, and they cover a huge spectrum – golf complexes, casino resorts, theme-based lodging, skiing destinations, amusement parks, museums and zoos, concert venues, and fitness centers.

Source: TradeSmith Finance

EPR’s Quantum Score of 89.7 is in my buy zone, though the fundamentals are a little lower than I usually like to see them. The technicals are as strong as they can get.

Revenue shrunk last year but is expected to return to 2.5% growth this year and continue growing throughout the rest of the decade. FFO also dipped last year with analysts forecasting a 4.4% increase here in 2025 and continued growth in the years to come.

That’s not eye-popping growth, though the three-year earnings growth of 27.5% is good. The healthy 20.9% profit margin lifts the fundamental rating, as well as a nice valuation of 18.5 times future earnings. Debt is high at 132.6% of equity.

The technicals are super strong right now, thanks in large part to a huge 42% rally off the April lows. The only factor working against the stock in my technical algorithms is that it has been 63 days since the 52-week high, which also happens to be the last day we saw a Big Money buy signal (July 14).

Source: MoneyFlows.com

But we shouldn’t ignore the clusters of unusual buying in the first part of the year and again from late May through mid-July. Big Money often buys in clumps to try and lay low and not be found out, which is why I designed the Quantum Edge system to pick up on those signals.

For EPR, though, the fundamentals make me hesitant to run out and buy it, knowing that there are other higher-rated stocks out there with the fundamentals, technicals, and Big Money inflows that are predictive of higher prices.

I know it’s hard to track what institutions and hedge funds are doing. They try to be as quiet about their buying and selling as possible. But the edge we get tracking those money flows is enormous.

We can tap into the roughly $500 billion that moves through the market every day and see which stocks, REITs, and ETFs are getting the lion’s share of those flows. 

TradeSmith CEO Keith Kaplan was so enamored with my system’s unique ability that he reached out to form a partnership and put together a special presentation to show you exactly how my system works…

And how it can help you 5x the performance of the stock market by getting in front of billions of dollars of institutional money.

You can view it here.

Wall Street tracks your investing data, and it’s time to turn the tables. Now is an especially opportune time to put that advantage to work as we head into what I expect will be a big finish to 2025 with lots of money flowing into stocks.

The Post-Cut Play You Have to Make Today