Brad Thomas’ “Amazon’s Secret Royalty Program” Stock Picks

Brad Thomas recently released a new stock teaser pitch about what he’s calling “Amazon’s Secret Royalty Program.” And according to the presentation, this so-called “program” can help regular Americans collect $28,544 or more in “royalty” payouts.

What’s it all about? Is it legit? And what stock is he teasing?

That’s what I wanted to know. So I did some digging to see what I could find, and in this post, I’ll show you what I found to help you make sense of it all.

Let’s start with what this “secret program” is all about.

Then I’ll show you what stock I think he’s teasing.

What Is “Amazon’s Secret Royalty Program?”

Brad Thomas claims that “Amazon’s Secret Royalty Program” involves an “IRS loophole” that allows regular Americans to collect “royalty” payouts to the tune of $28k or more.

“What few people realize is that a portion of Amazon’s massive profits — billions of dollars each year — gets paid out through what I call ‘Amazon’s secret royalty program’…

“I’m talking about an IRS loophole that allows regular Americans to collect ‘royalty’ payouts, every single year — without having to own a single share of Amazon stock.”

Source: https://web.archive.org/web/20230525051703/https://secure.widemoatresearch.com/?cid=MKT736872&eid=MKT740105&assetId=AST299109&page=2

According to Brad Thomas, when you “buy into” this program, you gain the right to collect these payouts without having to buy Amazon shares or sell any products.

“When you buy into ‘Amazon’s secret royalty program’…

“YOU gain the legal right to collect “royalty” payouts when people shop on Amazon…

“And you can do this:

“Without having to sell any products online…

“Without having to become an Amazon Prime member…

“And without ever having to buy — or own — a single share of Amazon stock!”

And apparently, it all has to do with a “critical asset” Amazon needs for its business (its warehouses), which he claims we can “own the rights to.”

“When you buy into ‘Amazon’s secret royalty program,’ you own one of Amazon’s most critical assets:

“Their biggest warehouses…

“That means YOU are an owner…

“Giving you the legal right to collect a portion of the fees Amazon pays in ‘royalties…’

“Not like a traditional royalty. Instead, these payouts are tied directly to the fees Amazon pays to use YOUR warehouses…”

That’s the marketing pitch, anyways…

What’s it (really) about?

In short, it’s all about a Real Estate Investment Trust (REIT), which, as Investopedia puts it, is a company that owns, operates, or finances income-generating real estate.

Basically, a REIT is a company that acquires real estate (in this case, commercial warehouses) and leases that property to other companies to generate revenue. The company then pays out at least 90% of its taxable income each year as dividends to its shareholders.

So, despite all the sensationalist hype in the teaser… what Brad Thomas is really recommending here is shares in a REIT that pays a dividend.

I don’t know about you, but I wasn’t a big fan of this pitch.

The whole thing gives you the impression that you can join some “secret program” and start collecting “Amazon royalty payouts” to the tune of $10,000s.

Yet, that is absolutely nothing like how it (actually) works.

In reality, it’s about investing in a REIT.

And as I’ll explain in the next section, the company he appears to be teasing doesn’t pay a particularly high dividend, so in order to earn anywhere near “$28,544,” you’d need to invest at least a million dollars. Yes, really.

What Stock Is Brad Thomas Teasing?

In order to find out the name of the company Brad Thomas is teasing in the presentation; you need to read a research report he put together called “Amazon’s ‘Secret Royalty’ Program: The Easiest Way to Collect Up to $28,544 Per Year From Amazon.”

And the only way to access that report is to join his flagship newsletter, Intelligent Income Investor (for $49), because this report is given to those who join.

I am a member of this service, but I haven’t seen that report yet. Nor could I share the contents of that report even if I had, as it’s a paid service.

But I DID look into the clues Brad Thomas shared in the (May 2023) teaser, and my research has led me to conclude that his stock pick here is likely Prologis Inc (PLD).

Prologis is a California-based REIT that, according to Wikipedia, is the largest industrial real estate company in the world. And according to CNBC, it’s a “major Amazon landlord.”

Why do I think Brad Thomas’ pick is Prologis?

Well, what put me onto this company initially was that Brad Thomas mentioned SEC filing 001-13545 in reference to the company he was teasing. And that led me to a Form 10-K document filed by Prologis regarding its financial performance.

Next, I looked at some of the warehouses he said the company he’s recommending leases to Amazon, and that further increased my conviction that it’s most likely Prologis.

Finally, I looked into the “MEGA warehouse” Brad Thomas talked about in the pitch, which he said is located “just east of L.A.” and that it will be the “largest Amazon warehouse in the world.” And while he doesn’t specifically say it, he more or less suggested that this new warehouse could benefit those who buy into the REIT he’s teasing.

“Amazon Set to Launch Its Most Ambitious Project Yet… A New MEGA Warehouse

“A new MEGA warehouse, located just east of L.A.

“It will be the single, largest Amazon warehouse in the world.

“We’re talking about a five-story, state-of-the-art facility that will be over 4 million square-feet in total…”

[…]

“The project, which has been underway since 2019, is finally set to open just a few months from now…

“And when it does, it will create thousands of new jobs… And be equipped with leading-edge industrial robotics systems to ship more than 125 million packages per year — from this one location alone!

“And here’s where it gets good for you…

“Because as demand for Amazon products continues to grow, and Amazon continues to expand…

“Your payouts should continue to soar…”

The warehouse Brad Thomas is referring to appears to be a new 4 million square foot warehouse being built in Ontario, California (which is just east of L.A.).

And according to therealdeal.com, Prologis is the “only developer working on a 4.1 million-square-foot development in Ontario.”

So, while I can’t be 100% certain without seeing his research report, it seems to me that the company Brad Thomas is teasing here is Prologis.

He also teased a second “secret royalty” stock associated with Amazon’s AWS data centers, but the clues he shared didn’t lead me anywhere.

And he pitched a third company, which I managed to uncover.

So let’s discuss that now.

Brad Thomas’ “Top Secret Energy Royalty” Pick

Toward the end of the presentation, Brad Thomas pitched a company in the energy sector, which is a sector that he predicted: “will continue to be one of the top-performing sectors in 2023 and 2024.”

And he specifically teased an energy company that he says “focuses on the production, transportation, and storage of natural gas.”

Here are the clues he shared:

“Already, billionaires like Warren Buffett are piling into big energy stocks including Chevron and Occidental Petroleum…

“However, I’m not recommending any of these big names…

“Not Chevron, Occidental, Shell, or any energy stock you may be familiar with…

“After working on the Presidential Advisory Board, I discovered a smaller, more exciting energy company, many folks have never heard of…

“This small company focuses on the production, transportation, and storage of natural gas… And they’ve quietly become one of the top energy exporters in North America…

“And when you buy this small energy stock, you essentially “own the rights” to a critical asset…

“In this case, you could own a share of over 91,000 miles of energy pipeline infrastructure in North America…

[…]

“And that’s not all…

“You’ll also own gas storage facilities in Texas, Pennsylvania, and Louisiana…

“Along with offshore wind farms, solar, hydroelectric, and geothermal power generators…

[…]

“They recently received $1 billion in financing from JP Morgan, Bank of America, and Barclays…

“But, what I love most, perhaps, is that it pays an ‘energy royalty’ — which has gone up for 5 years straight…”

What’s he teasing here?

I’m not 100% sure what this one is. But based on the clues, it’s possible he’s teasing Energy Transfer LP Unit (ET) here, a U.S.-based natural gas pipeline company.

I say that mostly because it’s the only company I could find with over 91,000 miles of pipeline. According to a March 2023 article on jpt.spe.org, the company owns and operates 120,000 miles of pipeline and associated infrastructure network across 41 states.

Some of the other hints he dropped seem like a ballpark match, too, but it’s unclear. So if you have any ideas on what it might be, let me know in the comments below!

Bottom Line

As mentioned earlier, while I haven’t read the report associated with these picks, I am a member of Brad Thomas’ Intelligent Income Investor service.

I deliberately avoid reading the reports before reaching these presentations because I can’t share what I learn as a paying subscriber. But based on the clues, I think I’ve managed to uncover at least one of Brad Thomas’ picks here (Prologis) and possibly a second.

Either way, I would suggest taking this presentation with a huge grain of salt.

Brad Thomas seems like quite a knowledgeable investor, and, as I explain in my review of his Intelligent Income Investor newsletter, his service has a pretty decent track record.

But I really didn’t think much of this pitch.

In my opinion, it was quite overhyped and would likely lead the average person to the wrong conclusion about what he’s recommending (a REIT).

It reminded me of a different teaser I looked into a while back from a “guru” named Jason Williams, which was also about an Amazon warehouse-related REIT. And that was one of the most overhyped presentations I’ve ever come across.

In any case, I have no idea if the investment ideas he shared in the teaser are worthwhile or not (I’ll leave that for you to decide), but I hope what I’ve shared has helped shed some light on the presentation.

And if you want to know more about his service before deciding if it’s a good idea or not, check out the review I linked to earlier.

Thanks for reading!