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Is PUBM Stock a Solid Long Term Investment?

Stocks

Diversifying your investment portfolio effectively is probably one of the more challenging things that you'll ever be required to do. After all, it's not exactly easy to pull this off without having at least a few of your options that end up costing you money. One reason this happens is because the stock market isn't exactly the most stable place to invest your money. People do it because when it works out, it can mean a big payday in your favor. When it doesn't, it can also mean that you lose a lot of money. It's a risk, but it's one that a lot of people feel is worth taking. The other reason that it can be difficult to build your portfolio is that it's not always so easy to determine which companies you should invest in and which ones you should avoid. That's especially true when you're talking about long-term investments. If it's difficult to effectively predict what a particular stock is going to do within the next few weeks, it's even more so to determine what it's going to do within the next several months or perhaps even the next few years. Predicting it with any level of accuracy is akin to walking on water. Nevertheless, people try to do this very thing each and every day, largely because they're trying to find a way to make enough money to cover expenses in the long-term after they retire. One stock you might want to consider checking out is PubMatic, traded as PUBM on the stock market. The question is, is it really a good long-term investment or is it just going to be another stock that wastes your money?

What Is PubMatic All About?

If you’re wondering what the company does, you’re probably not the only person who has this question. They are a software company that deals with digital forms of advertising for various clients. They create all kinds of software that helps get other businesses noticed through social media and other digital platforms. Obviously, this is a service that is needed by virtually anyone who wants to have a successful business. That said, PubMatic certainly isn't the only game in town. They may be one of the more advanced companies that deals with advertising across various digital platforms, but businesses that don't utilize them still find ways to be successful. That begs you to ask whether or not it would be worth it to invest in them as a long-term investment option. Do they really have the market cornered? Do they have enough clients to be a solid investment option, especially when you consider the possibility of them still being successful two or even three years down the road? Perhaps the most important question to ask is where all of the current signs are pointing to. Do they indicate the potential for this company to perform like nothing else or are there signs that things might not be going so well, even now? All of these things are going to be questions that you're going to want answers to before you decide to invest in them, especially if you're using them as a long-term investment option. That's precisely why it's so important to look at things carefully and maybe even go back and look at them one more time just for good measure.

By the Numbers

The best way to determine whether or not this particular stock is a good long-term investment option is to look at how it's been performing recently. If you take current figures, you'll see that the stock rose slightly, from $21.09 per share to $22.03 per share. In other words, it was up by 4.46% on the last full day of trading. That said, things haven't always gone so smoothly for the company, especially recently. In fact, the stock has actually fallen by 17.86% over the course of the last week and a half. That's definitely enough to make anyone who's considering this as a long-term investment option weary. Perhaps the thing that's even more troublesome is the fact that the stock has performed poorly throughout seven of the last 10 days of trading, experiencing an almost-constant downturn. That's not all. Many stock market analysts believe that this particular stock will continue to fall by more than 25% over the course of the next few weeks. By the time it's all said and done, they expect the stock to sell for somewhere between $15 and $24 per share. Granted, that's a big difference. That fact alone should tell you that there is a lot of disagreement about the potential for this stock to either recover or continue its downward trajectory, even among individuals who predict this kind of thing day in and day out. You might want to ask yourself whether or not you want to get involved with purchasing something as a long-term investment option if the people who are typically considered the experts on such things can't come to some type of an agreement about it. On the other hand, it's always a good idea to have more information available to you before you make your final decision. Perhaps there is a reason for its recent performance. In order to know what's happening, you have to dive deeper. The question is, are you diving deeper to try and find a reason to make a purchase or to avoid touching this stock in any manner whatsoever?

Diving Deeper Only Makes the Picture Harder to See

You already know that in order to make a truly educated decision about this (or any other stock), you need to dive deeper in order to get more information. The problem with this particular stock is that the more information you uncover, the more difficult it is to tell exactly what this stock is likely to do in the long term. Consider this fact. You already know that they are a company that deals with computers and technology. As far as the companies in this particular sector which compete in the stock market are concerned, there are 897 different companies of this particular type. Currently, this company is rated 297th out of the 897 companies that are publicly traded. That doesn't exactly sound like a company that's faltering and getting ready to tumble even further. However, first glances can be deceiving. Upon further inspection, you will also notice that stock market analysts don't even give this company three out of a potential five stars. To be more exact, the current rating is 2.31 stars. If you were considering eating at a restaurant or staying at a hotel, would you even take a second look at one that wasn't even capable of rating two and a half stars out of five? Most people would turn and run the other way as fast as possible. When you look at things in that particular context, it generally tells you that more than half the time, the institution in question is not capable of providing the type of service that most reasonable people would expect. Now take that same context and apply it to what's going on with this stock. Does that change your perspective? Most reasonable investors would probably decide that it's not the best option for a long-term investment. In fact, they might even decide it's not a very good option to do anything with the short-term, which is exactly why so many people have been selling their shares within the last couple of weeks.

Understanding What’s Happening

Perhaps the last thing you really need to gain a thorough understanding of is why the company's stock has been in freefall mode as of late. It's also worth noting that traditionally, the stock has had a tendency to go up and down with a fair amount of regularity, although none of the downturns have been quite as dramatic as the one that it is currently going through. Obviously, you are going to want to know why this is happening. Much of it comes down to the fact that the company had been steadily moving forward with new technology and an ever-expanding client base, up until fairly recently. The thing that's been troubling so many investors lately is that there's almost no news coming from the company whatsoever. As such, it makes it hard to tell exactly what's going on with their customer base and it doesn't help that a technology-based company isn't making any reports on technology updates. World events have come into play here as well. For example, China has been making great strides lately with their incredibly fast advancement in similar fields. The truth is, it wouldn't take much for them to overtake this or any other company in this particular field and investors know it. The silence that comes from PubMatic only serves to make people more unsure about what's actually going on over there. It might be easy to imagine that they're simply waiting to make a full report when they publish the next quarter's figures, but it's just as easy to imagine that they're struggling with technology, clientele or both. If that's the case, it could be a valid reason for their silence. Clearly, some investors have started to wonder if the company is being so quiet because things are simply not going their way and they're trying to contain the damage before anybody finds out how bad things really are. Regardless of what's actually going on, the fact that PubMatic is continuing to remain largely silent about virtually everything is not helping their cause. In fact, investors are becoming more and more unsure about them with each passing day.

Playing Devil’s Advocate

You have to believe that the company has at least a few people that are employed to not only track their progress in the stock market, but pay attention to the types of press releases that are coming out about them and their competition. If they know that their stock is falling in value because they're not keeping themselves in the news, you would think that they would do something about that unless there is a major problem that they're trying to deal with behind the scenes. That said, there's always at least a few stock market analysts that tend to look at things in a different light. In this particular case, a few of them believe that this is actually the perfect time to purchase this exact stock as a long-term investment, largely because it looks like it's going to drop even further until you can purchase shares for under $20 each. They cite the fact that over the course of the last three years, the stock has increased in value by as much as ten times what it was originally worth. Granted, that is a valid point but it's not necessarily an indicator of how the stock is going to perform in the future. As a matter of fact, it seems like there is more confusion centring around this particular stock than anything else. It's hard to find a genuine consensus about its potential to either start performing as it once did or continue to slide. That makes it a very risky decision when you're trying to use it as a long-term option because there is absolutely no guarantee that it's going to be an effective one.

At the end of the day, no one can really decide for you whether you should purchase this stock as a long-term option or not. If things pan out for the company, you might be able to cash in on a relatively big payday at some point in the future. However, it is important to consider the possibility that the stock could end up being worth significantly less than you’d pay for it now. Worse yet, there's no guarantee that the company will even continue to be in business two or three years from now, as the lack of any news whatsoever is concerning. If you get an adrenaline rush from high risk trading, this might be a good option for you. However, if you are looking into long-term investment options in order to improve your own financial well-being, it seems that there are better options out there that don't come with as much risk.

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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