An excellent set-up means the big boys and girls on Wall Street are more inclined to buy and hold shares, not dump them. Once a strong chart pattern has been established, an IBD-targeting breakout offers traders the best opportunity to reap gains at the start of a potential big run. To get this ideal entry in a cup without handle, simply take the cup’s left-side high.
- The company then used the proceeds to repurchase debt or exchange debt for equity, resulting in a liabilities reduction of $62.28 million.
- According to newly updated data on a MarketSmith chart, the stock now holds a revised float of 196.4 million freely traded shares.
- Shooting for a 95 or higher, particularly at the start of a new bull market, is even better.
AMC shareholders had good reason to look forward to another rebound. However, a key change in the capitalization of the stock led to a massive decline during August and September. On Jan. 31, after the Federal Reserve’s first meeting of 2024 on interest rates concluded, the stock finished 1.5% lower to a record low of 4.05 and dropped nearly 34% for the month. “My negative view towards the shares is really a valuation call,” Handler said. “We continue to believe the company’s shares are trading at an irrational valuation.” Wold sees the stock conversion as a way for AMC to weather the global exhibition industry’s prolonged post-pandemic recovery as well as any future impacts from the ongoing writer and actor strikes in Hollywood.
That investment group, Beijing-based Wanda Group, is still the company’s largest shareholder. Despite a strong latest quarterly earnings beat, AMC is still struggling to stay afloat – and is being pretty open about its financial woes. That hasn’t helped the share price recover, nor does it look set to do so anytime soon if AMC plans more share sales.
They include an improved 70 Earnings Per Share Rating on a scale of 1 to 99, up sharply from 23 in recent months. AMC’s ratings in IBD Stock Checkup are still showing extremely bearish tints. Keep in mind that blockbuster movies or TV shows don’t necessarily lead to https://g-markets.net/ an equally sizable windfall for the theater operators. This story examines fundamental, technical and fund ownership factors to determine if the Leawood, Kan., company with 900 theaters and 10,000 screens scores a good probability of making money for stock traders.
What’s the latest with AMC?
The sale could represent as much as 7.7% of the 519.2 million shares outstanding. When choosing growth stocks for the biggest potential gains based on the key elements of IBD’s growth stock investing paradigm, focus on those with a Composite Rating of 90 or higher. Shooting for daralarkan a 95 or higher, particularly at the start of a new bull market, is even better. AMC’s market value recently plummeted to $782 million, according to MarketSmith, before rebounding back above $850 million. At one point on Feb. 28, 2023, the stock was valued at $14.9 billion.
AMC Entertainment Holdings Inc. Cl A stock outperforms competitors on strong trading day
For a few days in August 2022, AMC tried to cross a nearly 12-month trendline that connects the September 2021 peak (32.43, adjusted for a stock split) with lower highs in November 2021 (28.23) and early April 2022 (21.09). For the very aggressive trader, this trendline breakout near 15 offered an uber-speculative entry. The Accumulation/Distribution Rating has improved to a slightly positive C+ grade on a scale of A to E. A grade of C+ or higher points to institutions, on net, accumulating shares. The RS Rating runs from 1 to 99; for investors selecting top growth stocks, the higher the RS Rating, the better the stock in general.
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“Once AMC completes these actions, it will have the authorization to issue up to 550 million additional shares without further shareholder approval,” said Reese. “AMC may use the opportunity to repay some or all of its debt balance while AMC shares are still trading at a premium.” The U.S. movie business remains below pre-pandemic levels, and the ongoing strikes in Hollywood have clouded the release slate for the rest of 2023 and 2024. AMC and pop star Taylor Swift announced last week that the theater chain is serving as the distributor for a concert movie of The Eras Tour to be released in October. Now, AMC’s plan to convert its preferred shares into more common stock has a lot of investors nervous that the move will basically dilute the stock’s value. At $435.3 million for the second quarter, that’s down 12% year over year and has plummeted 75% in the last two years.
The units had only been publicly traded on the New York Stock Exchange for a year, and the conversion only went ahead after a settlement was reached with its shareholders. Under the agreement, AMC will provide an estimated $129 million of stock to common shareholders to nix any legal claims about the stock conversion plan in the bud. This news follows AMC’s closing of its $350 million at-the-market (ATM) offering earlier this month. AMC raised the capital through the sale of approximately 48 million shares.
AMC Plans to Issue 3.3 Million More Shares of AMC Stock
Prior to the giant gain on June 2, 2021, over just five sessions of trade (May 24 to 28), AMC obliterated the short sellers by rising as much as 203%. In the week ended June 4, AMC stock almost finished up 100% or more for a second straight week. On Jan. 7, AMC announced that the Eras Tour movie officially became the highest grossing film in box office history in the concert and documentary film category, achieving $262 million in ticket sales to date. That broke the $261.2 million record of the 2009 concert film “Michael Jackson’s This Is It.” Shares of AMC Entertainment Holdings Inc. fell 22.3% Monday ahead of the company’s planned stock conversion.
Adjusted EBITDA jumped to $193.7 million from a negative $12.9 million a year ago. Going beyond the fundamentals, growth investors benefit in a big way if they understand how well a stock performs vs. a key benchmark. As for AMC stock, IBD’s relative strength line, which graphs a stock or ETF’s day-to-day performance vs. the S&P 500, has plunged since Aug. 14. This means AMC has sharply underperformed the S&P 500, especially since mid-August. AMC Entertainment posted a third-quarter net loss of 9 cents per share amid a healthy 45% rise in sales to $1.41 billion. According to Yahoo Finance, analysts on consensus expected a net loss of 27 cents and $1.23 billion in sales.
AMC Entertainment shares plummeted more than 20% on Tuesday, slipping to a new 52-week low of $2.46 per share, as investors brace for a stock conversion later this week. AMC previously reached memestock status in 2021 when Reddit retail traders bought up the stock while it was heavily shorted. Since then, AMC has capitalized on the stock’s newfound notoriety by regularly issuing new shares to raise capital. That attitude helped AMC survive the pandemic, but now, investors have had enough.
Wold currently holds a $4.50 price target for the stock, on the high end of analysts who cover AMC. On a split-adjusted basis, that is AMC’s lowest close on record, according to FactSet. “So they hired smart lawyers who figured out a way to work around the issue, by issuing out preferred shares,” Davidoff Solomon said. Ironically, the stock price plunge might boost short interest and start the memestock cycle all over again. It’s all fun and games, but AMC has to get serious about fixing its free cash flow or risk bankruptcy.
The consensus among Wall Street analysts is that investors should “strong sell” AMC shares. AMC Entertainment Holdings, Inc., is the world’s largest movie theater chain with over 11,000 screens. The company was founded in 1920 by the Dubinsky Family and is headquartered in Leawood, Kansas. The company has been in business for over 90 years but went public in 2013 after getting bought out by an investment group seeking to boost the company’s global presence.
