In troubled times where do investors put their money?

Given the current (and outlook for more) worldwide financial turmoil it shouldn’t surprise us to see some formerly “speculative” labeled stocks morphing into pillars of low risk conservative investments. This transition is in part a function of comparative earnings expectations.

In this turbulent environment, comparative earnings expectations leads investors to correctly perceive more risk in Financial stocks, and less risk in beer companies.

So what?

Until now, PTSC has been labeled a “speculative buy” by some of the few analysts following the stock. In part, that’s a comparative rating. Compared to Bear Sterns, analysts’ measurements (often comprised of proprietary models) have classified PTSC as relatively unproven with litigation worries - speculative.

Now over 5 quarters worth of actual earnings is booked, all positive except for a 1 penny EPS loss. Add to that the litigation settlement and the rapidly increasing sales. Compared to Bear Stearns, PTSC is looking a lot less speculative. But the big comparative difference, yet to be fully recognized by the market in general, is that like beer sales, PTSC’s product is recession proof. PTSC has captive customers – law requires these customers to buy the product or be subject to litigation – likely a more expensive outcome for tham.

So when some look at my EPS worst case projections (based on PTSC’s historical EPS-per-License averages) they see a paltry stock price outlook. I see a strong fast growing beer company surging in troubled times. While whole market segments and many individual companies will tank, PTSC is looking more and more like a safe haven.