AMC Entertainment (NYSE:AMC) is the most popular stock this week for several reasons. One of the first examples of a meme stock is AMC Entertainment (AMC), along with GameStop (GME).
Even during the first epidemic days and subsequent market recovery, AMC has been gaining attention. Let’s find out why AMC is the subject of this week’s discussion.
What’s the point of AMC?
As part of its acquisition plan, AMC has expanded its presence in Connecticut by more than doubling its current number of sites. Although shares are seeing a short squeeze as short interest approaches 20%, more prominent investors are now getting involved. Ray Dalio of Bridgewater is one of the most notable investors in AMC. AMC is now being searched for more often on Google than either Twitter or GameStop in the last 30 days.
Strong Q1 Results
A six-fold rise in admissions and a five-fold increase in food and beverage sales contributed to the roughly four-times gain in income. On a larger outstanding share base, the net loss per share decreased from $1.42 to $0.65 in the prior year. At the end of March, the government had a solid balance of $1.2 billion in cash.
However, AMC points out that it has to raise attendance levels to match pre-pandemic levels on this front, despite worries about cash flow generation and profitability. According to the successive quarterly gains in attendance in 2021, there are positive signals of a demand rise.
The company’s yearly sales increased from $1.2 billion in 2020 to $2.53 billion in 2021 due to this change in fortune. Analysts predict that the company’s top line will reach $5.2 billion in 2023 as more people go to the movies.
Additionally, in March, AMC paid $27.9 million for a 22% stake in Hycroft Mining Holdings.
Intensification of trading and consumer interest
AMC is becoming more popular with consumers and businesses alike, and this trend is expected to continue. Our research shows that 4,1% of our retail investors’ portfolios contain AMC, with an average portfolio allocation of 7,44 percent. Furthermore, TipRanks shows that the most successful investors have an AMC allocation of 6.98 percent of their portfolios.
Bigger names are also flocking to AMC this time around. Companies run by Ray Dalio and Philippe Laffont, respectively, have purchased AMC stock for $13.4 million. Gotham Asset Management, founded by Joel Greenblatt, holds a $2.7 million stake in AMC. Additionally, Bridgewater is selling its Tesla (TSLA) shares to purchase AMC. During the third quarter, hedge funds purchased 550,200 shares of AMC.
Our data dive at TipRanks, on the other hand, reveals our users are bullish on the company, with buys outnumbering sales since April. TipRanks’ members continue to make AMC one of their top 60 most popular trading stocks.
AMC has a moderate sell average rating, based on two holds and three sales, which indicates that analysts do not share this excitement. The $7.67 average price objective implies a 41.36 percent decline in AMC’s stock price. Traders of diamond hands-on Reddit may have a different opinion.
The stock’s ten-day average trading volume of over 51 million shares, which is approximately 10% of the company’s outstanding shares, shows the increased interest in the stock. A price-to-sales ratio of 2.1 indicates that AMC is now undervalued, and the stock has gained 3% over the last year, compared to the S&P 500’s 6.2% fall.
The Final Word
AMC has a lot going for them right now. Investors and moviegoers alike are devoted to it. As a result, there is still potential for improvement in attendance. Avatar 2, Black Panther, and Jurassic World sequels, as well as Top Gun: Maverick and Thor: Love and Thunder, are all planned to be released in 2022, which could help boost ticket sales.
AMC’s many excursions into new territories are still up in the air. A co-branded credit card might be launched, NFT offers could be made available, and cryptocurrency payments may be accepted online. It’s been five days, and shares have risen roughly 10%.
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