Pernix Therapeutics Holdings Inc (NASDAQ: PTX)
Pernix Therapeutics Holdings is having an incredibly strong day in the market today, and for good reason. A recent SEC filing showed that smart money is now investing in the company, and that’s causing quite a bit of excitement surrounding the stock. Today, we’ll talk about the large investment that was made in PTX, how the market reacted to the news, and what we can expect to see from the stock moving forward. So, let’s get right to it…
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PTX Receives Large Hedge Fund Investment
In an SEC disclosure that became public on Friday, an investment firm announced that it has made a large investment in Pernix Therapeutics Holdings, the nano-cap specialty pharmaceuticals company. According to the disclosure, Point72 Asset Management has purchased a 5.8% stake in the company. Point72 Asset Management is a highly respected asset management company that was founded by billionaire investor Steven Cohen.
Why This Matters
One of the things that investors do regularly is follow the smart money. When large hedge funds are investing in a company, it’s a sign that there’s something within the company that is likely to lead to strong growth in the future. So, based on the large investment made by Point72 Asset Management in PTX, investors are expecting exceptional growth in the value of the stock moving forward.
How The Market Reacted To The News
One of the first things that new investors learn is that the news moves the market. Any time there is positive news released with regard to a publicly-traded company, we can expect to see gains in the value of the stock associated with the company. Adversely, when negative news is released with regard to a publicly-traded company, we can expect to see declines in the value of the stock associated with the company. In this particular case, the news released that surrounds PTX is overwhelmingly positive. After all, a large asset management firm sees value in this nano-cap stock. As a result, we’re seeing incredibly strong gains in the value of the stock today. Currently (10:30), PTX is trading at $1.04 per share after a gain of $0.29 per share or 38.65% thus far today.
What We Can Expect To See Moving Forward
Moving forward, I have a relatively mixed opinion of what we can expect to see from Pernix Therapeutics. First and foremost, the fact that a large asset management firm is now heavily invested in the company is overwhelmingly positive news. However, it’s also important to keep the risks in mind. The truth is that investing in nano-cap stocks can be incredibly risky. When it comes down to it, these stocks don’t have much of a history. However, in this particular case, PTX is starting to make a name for itself. In fact, in 2014, it was considered to be the fastest growing specialty pharmaceutical company in the world. I’m also relatively impressed with the company’s business model as they target under-served areas of the medical industry, which could prove to be incredibly profitable in the long run. While I am seeing tons of positivity surrounding the stock, however, I do still think that it’s best to move with caution on this one.
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What Do You Think?
Where do you think PTX is headed moving forward and why? Let us know your opinion in the comments below!
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