Is RPRX a Solid Long Term Investment?

It’s not always easy to decide which stock you should invest in. As a matter of fact, it can be exceptionally difficult. Even people who have spent years upon years studying the stock market often find it difficult to determine with any true level of accuracy whether or not a chosen stock will be capable of performing well over the next 12 months. Despite that fact, many people consider long-term stock to be the place where people have a tendency to make the most money. That’s largely because it’s possible to purchase the stock and then hold on to it for several months until it can be resold at a rather dramatic profit. Obviously, some stuff works better than others. In the case of Royalty Pharma, there have been some mixed reviews. That said, a lot of people do believe that the company is capable of performing well in the long-term.

Background

If you’re curious, it’s important to know that Royalty Pharma is definitely not like your average pharmaceutical company. In fact, quite the opposite is true. They don’t operate under the same guidelines as most pharmaceutical companies have operated under for years and years. In fact, they actually purchase royalties from other pharmaceutical companies and then cash in on the prophets whenever those companies are struggling to make a profit themselves. It’s definitely not your standard approach for this type of business, and that’s something that has a tendency to make investors nervous. The stock market has a tendency to be volatile, even for companies that have been traded there for years and years with a great deal of success. Having something new mixed into the fray doesn’t tend to make people feel comfortable. That’s even more true when it’s a company like Royalty Pharma that is trying what amounts to a brand new business model. Despite the fact that they seem to have a solid business plan, it’s still something that makes a lot of investors feel extremely uneasy. There just isn’t enough information available about a company that operates in this type of method to determine whether or not such activity can be successful.

Poised for Failure?

Some people who have spent years analyzing the stock market have indicated that they are concerned about this particular company because of the very foundation with which it chooses to operate. The problem, at least as far as they’re concerned, is that more than 50% of the board members are also stockholders, effectively allowing them to determine which direction the company moves in and how quickly. Clearly, this is something that can prove to be problematic. Historically, these types of organizations have found themselves at odds with investors in a relatively short amount of time, usually because it is the board members who control how much money each share of stock is worth based on their own individual needs. In addition, there is a much bigger perceived chance for corruption when the people who are controlling the stastock are also on board, thereby controlling the actions of the company. In short, it does appear like there is a system of checks and balances and that can make investors extremely uneasy. When they are uneasy, they have a tendency not to buy the stock and that causes a stock to go down. Most analysts don’t really see the way Royalty Pharma does business to be changing anytime in the near future, and as a result they feel like most people will end up shying away from this stock because it simply feels like they’re walking on shaky ground.

The Flip Side of the Coin

Of course, not all analysts agree that stock in Royalty Pharma is headed for the dumpster. In fact, there are a few individuals that feel like it is actually poised for great success. There’s no doubt about it, the stock has been down lately but these analysts also point out that all stock fluctuates and they feel like it’s on the cusp of rallying in a big way. At the moment, the stock is available for sale for $24 per share. These analysts feel like the stock could end up being worth $42 per share in a relatively short amount of time, perhaps only a few months. While not all analysts agree, those who do agree with this assumption feel like it is a solid long-term stock option. Some of them would even go as far as saying that investors would be remiss for not taking the opportunity to invest in it now while we have the chance to do so.

What About Your Everyday Investor?

So, how does all of this play out for the everyday investor who is just trying to pick the right stock so that they can make ends meet after they retire? The key is to pick stock that has proven to be a solid performer while peppering your portfolio with a few unique, perhaps even radical ideas that could net you a very nice payday, if they perform well. Of course, that also means that there is just as much of a chance that they will tank and you will end up losing money in the process. The idea is to have most of your portfolio composed of stock that you know can perform well and then take a chance with just a few things that you believe are capable of performing better than most analysts think it will. As a result, this might be a good stock option for the long term. There is certainly no guarantee that it will perform well in the long-term, but there’s no guarantee that it won’t, either. At the end of the day, you as the investor are the only individual who can decide what is and is not right for you. If you feel like taking a chance on a company that doesn’t do business in the same way that other companies have traditionally done business, this might be a good option to look at. So far, the stock has fluctuated quite a lot, but it hasn’t really fluctuated anymore than stock in companies that are far more established. As a result, there is some potential there to make solid money out of the deal, if only you were willing to take the risk.