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Strategies & Market Trends : Three Amigos Stock Thread -- Ignore unavailable to you. Want to Upgrade?

To: Cary C who wrote (1667)	3/12/1998 11:53:00 PM
From: Raymond Hill	Read Replies (1) \| Respond to of 29382

Cary, You got a good price at $2.5 on PCTH warrants, especially since they went to $3.06 today. They really outran the stock today, as they were up 7/16 and the stock 1/8. I am expecting (or hoping) that PCTH will run up to the $8-9 area after solidly breaking above $7, so the warrants should rise to at least $3.75 to $4.50, if that happens. For people who buy stock on margin, the common is a better speculation when the warrant approaches a price that is close to 1/2 of the common. If it achieved a price of exactly one-half, it could do no better than the common, at least up to the exercise price, and would probably fall faster in a downturn. In the longer-term picture, we must assume that the warrants will be called, however, if the stock is in a major up-move at the time, the warrant could go higher than we think, and at a greater per cent than the common, at a price above 9 3/8. Glad to see you get back in. I was beginning to think that you were going to suffer the fate of many traders. Once they get out, they may fail to get back in and miss a big move. It is hard to know how high PCTH will go in the short-term, because it will be impacted by possibly large acquisitions, that we probably won't know about until they are reported. However, for PCTH to realize their $.80-1.00 earnings goal in three years, will require them to increase earnings by 40%-50% in each of the next three years. If they can do this, they will certainly be awarded an above average PE ratio by the market. Stocks growing at that rate are hard to come by. It is nice to know that Don Wright is confident enough in PCTH capabilities that he is not afraid to make a prediction like this.