Since September, a great mystery has ensued in shares of Pacific Healthcare Organization (PFHO). For no apparent reason, the price of the stock dropped from an all-time high in the $70s, to the $60s, to the $50s, and then into the $40s, where it has languished since.
I have found no satisfactory answer for the drop, and went long in early September in the mid-$50s. The best explanation I have seen (although I’m not sure if it’s correct) is the one posited by Seeking Alpha author The Specialist in his article Confusion Leads To Pacific Health Care Organization Sell-Off And Opportunity.
I view it as about 70% likely that someone buying shares right now (last trade at $44.50) will see their shares hit $60+ within 6 trading days. The 10-Q is out next week and I expect it to show the same ~70% growth we have seen continuously from the company for a long time now. It seems most likely that the drop in price had nothing to do with fundamentals, but we shall see.
Disclosure: PFHO is $44.50 at the time of this writing and I am long.