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Is PLBY Stock a Solid Long Term Investment?


When you think about a stock that will be a good long-term investment, you probably automatically think about something that is capable of standing the test of time. After all, you are looking at it as a profitable investment that you will end up cashing in on years down the road. That's why a lot of people start looking at things that have a proven track record. One such possibility is PLBY, more formally known as Mountain Crest Acquisition Corp. They're associated with Playboy magazine and they deal with creating products and experiences that are designed to help people have fun. That seems like it would practically be the perfect recipe for a solid long-term stock, but you already know that you can't just blindly go into these types of things. If you really want to know whether or not this would be a good option for you, then you have to put this particular stock under just as much scrutiny as anything else.

The Company’s Current Profile

Surprisingly, the company is currently trading at a very affordable price, just $11.02 per share. At the moment, it's up by 1.66%, having ended yesterday's trading at $10.66 per share. At least the first hurdle here has been passed. If you should decide that you are interested in purchasing several shares of this stock as a long-term investment, then you don't have to worry about paying some exorbitant price per share in order to get your hands on them. It's a lot more affordable to pay $11 per share when you want to buy a lot of shares at once than it is to pay for a stock that is selling for closer to $100 per share. The key is to find something that's selling for around this price range that you can hold on to for a while and then sell for close to $100 per share. Unfortunately, it doesn't always work out that way. Your job is to find stock that is as likely as possible to fall into that category and then do the best you can with it, after having completed as much research as possible. In order to determine whether or not this stock passes all the tests, you have to do a lot more investigation.

The Stock at a Glance

As previously mentioned, when you look at today's trading, you probably think that this might be an option that you're interested in learning more about. However, things can start to look very different as soon as you start looking at the stock's recent past performance. As a matter of fact, the price of the stock has actually fallen a shocking seven out of the last 10 days of trading. Overall, the stock only lost 17.7% of its value throughout those 10 days, but it still shows signs that something less than desirable might be on the horizon. When you break the numbers down further, you'll see that 395,000 shares were sold in one day alone. Throughout the course of this 10-day time span, 827,000 shares have traded hands. That in and of itself is cause for concern. As a matter of fact, a lot of people have started to wonder why so many people are selling off their shares so rapidly, even when you consider the fact that the stock has taken a hit all but three days out of the last week and a half. It seems as if shareholders are trying to get rid of the stock because they sense that things may not be going as well for the company as they would have the general public believe. Is that really the case? It's important that you know the answer to this question before you go any further. You don't want to invest in something that is supposed to make you money, only to have it turn around and tank a week or two later. It just doesn't make sense. If you're going to spend the money on this, then make sure it's money well spent.

A Bumpy Ride?

Most people turn to stock market analysts in hopes of getting some accurate predictions about how the stock is expected to behave in the future. The news doesn't get much better when you do that with this particular company's stock. In fact, most of them believe that the stock will continue to decrease in value for at least the next three months. A number of them believe that the stock will lose almost 24% of its value by that time. That's a significant amount and it's something that you should definitely take into consideration if you're thinking about purchasing the stock as a long-term investment. If that's not enough to make you stop and take note, it's important to realize that this isn't all of the bad news. Analysts are roughly 90% certain that a hold will be called on the price and that in turn will keep the stock's price between a little more than $8 to slightly over $11 per share during the duration of this entire three-month time span. In other words, you can purchase shares of the stock today and actually see them decrease by roughly $2 per share and then stay that way for the next 90 days.

Is that really how you want to begin with a stock that you purchased as a long-term investment? If you were to go through with the purchase anyway, exactly how long would you have to hold onto this stock before there would be any reasonable potential that it could start making you money? Perhaps the most important question that you have to ask yourself is whether or not you genuinely believe that this stock would ever be capable of making you the kind of money that you want to make. That's especially important to consider when you think about the fact that there are companies out there that have some genuine potential to make investors tens of thousands of dollars through long-term investments. When you have those options in front of you, it's hard to understand why anyone would choose something that may not even allow them to break even. If you're still not convinced, then perhaps it's time to find out even more about this particular stock.

Mixed Signals

One of the things that genuinely confuses would-be investors is that the company actually reported a strong second quarter, supposedly setting the stage for a great deal of future success. However, that's not exactly how things ended up going. You can fast-forward to today's trading, which has been thoroughly discussed in the above paragraphs, and see that despite those strong second-quarter earnings, the company still seems to be standing on shaky legs. This has caused a lot of stock market analysts to feel like there are so many mixed signals here that it is practically impossible to tell what the stock is ultimately going to do. A number of them feel like it's so hard to predict this stock’s behavior with any level of accuracy that they simply make predictions for it based on the past week and a half and then a disclaimer that things could change within the next couple of days which would effectively negate everything they said and create an entirely new prediction for the stock's future behavior. If you're the type of person that really enjoys investing in stocks that are a bit risky, this might give you an adrenaline rush because you genuinely don't know how things are going to go. On the other hand, if you're a person who is a bit more discerning with how you spend your money, it would almost seem like insanity to invest in the stock today. At the very least, it would seem to make sense to wait another couple of weeks at the minimum and then look at things again in order to determine whether the stock is still behaving the same way it is now or if things have changed for the better.

A Possibility of Long-Term Success?

What if you’re absolutely determined to buy the stock at today's prices, yet you want some type of prediction from stock market analysts regarding how this stock is expected to behave 12 months down the road? Despite its current issues and the fact that a lot of analysts seem completely baffled by its behavior, there is a sliver of good news here. In fact, some stock market analysts have looked at its behavior and made the prediction that by this time next year, the stock will have gained more than 218%. That is enough to get the attention of a lot of investors, even those who had probably decided that they would be avoiding this particular stock at all costs for the time being. Is it really true that the stock could suffer this initial period of not performing particularly well for three months and then more or less soar into the stratosphere after that? One thing that might help you decide whether or not you should go ahead and invest involves the score that some stock market analysts give stocks. Typically, they will score stocks of similar types so that you know how a particular stock is performing with regard to its direct competition. At the moment, this particular stock has been given a score of 73, meaning that it is believed that it will eventually perform better than 73 other similar types of stock that are currently being traded. For some investors, that number means everything and for others, it's just one piece of information that makes the bigger picture a little bit easier to understand. Depending on the things that you tend to look at when you make a decision, this may help you decide to go ahead and purchase shares to hold indefinitely. Alternatively, you may still want to wait and see what happens within the next couple of weeks. It's definitely not a blanket answer that fits every person across the board.

Food for Thought

There is one last thing that you should know before you make any decision whatsoever about this stock. It's important to realize that they haven't been publicly traded for very long. In fact, they've only been traded on the stock market for a little more than one year. That poses a problem in and of itself for some investors, because there isn't that much history to go on. That in turn makes it difficult to determine how the stock is likely to behave in the future because there isn't a lot of information about how the company has handled downturns in the past. Like so many other stocks, it came on the scene with a vengeance, gaining more than 200% of its value within about two months. From that point forward, it more or less plateaued and as you can see now, it's been struggling to hold its value. That's not entirely uncommon, but it's important to know how a company is going to handle these types of situations before you invest. In this particular case, there's not a lot of information to go on.

Is there a possibility that you could invest in this stock with the intention of holding on to it for a year or longer and end up making loads of cash in the process? Yes, that possibility is definitely there. On the other hand, there's also a chance that you could purchase several shares of the stock at today's prices and then find yourself stuck with something that isn't really changing for the better. Unfortunately, that's a risk with any stock. This particular one hasn't been performing especially well as of late, but there are some stock market analysts that believe all that will change in a major way within the next 12 months. At the same time, there are other stocks out there that are performing better. It all comes down to what you believe the stock is capable of doing in the long-term. If you genuinely think that you're sitting on a gold mine and there's a chance it will be performing in a superior manner a year or two down the road, then it might be a good idea to go ahead and invest while you can still get shares of the stock for a respectable price.

Allen Lee

Written by Allen Lee

Allen Lee is a Toronto-based freelance writer who studied business in school but has since turned to other pursuits. He spends more time than is perhaps wise with his eyes fixed on a screen either reading history books, keeping up with international news, or playing the latest releases on the Steam platform, which serve as the subject matter for much of his writing output. Currently, Lee is practicing the smidgen of Chinese that he picked up while visiting the Chinese mainland in hopes of someday being able to read certain historical texts in their original language.

Read more posts by Allen Lee

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