Other Guy, I read a while ago that "there is no such thing as a bad profit". While I point out how pps history gives rationale for holding beyond $17, there were those big placements PPHM made in the 70 cent to 80 cent pre reverse split range. Your $17 target is a nice risk reward balance for recent (reverse split timing through now) entrants to PPHM long positions. Recall that Ken Dart was among those later entrants.
However, valuation of PPHM ought to be in proportion to expected earnings and sales with approved treatments in the market as trials are indicating success (risk is that this will not happen). $17 pps is only about a $3 billion market cap. If there is success in the works, a higher pps recognizing unrealized share holder value ought to be in progress within a year or two of Pharma Partner announcement. That is why I placed my target expectations higher.
For most longs, $17 pps would still provide a return that outperforms the average annual 7% that has now been brought to question as being unrealistic. The rule of 72 with a 7% return would exhibit a doubling of funds with compounding over ten years. A cost basis of about $3.50 pps pre reverse split is like $17.50 pps now. So a ten year back cost basis of $1.75 pre RV would show an investor a market average return from holding ten years and selling now at $17.50. Of course PPHM investment risk has been much higher than mutual funds average returns so a higher pps (or lower cost average) would be needed to reward patience with PPHM.
Obviously, if PPHM is not delivering to expectations in trials, making comparisons to market average returns is ludicrous. 2014 has formed up as an interesting year.
Best wishes and IMO.
KT.
