Rather, its stock price is rising due to a large group of individuals collectively deciding to buy and hold the stock. Like many financial assets, when the demand goes up, the price moves in the same direction. AMC stock is up nearly 2,000% in 2021, and it has some people asking themselves if they are missing out on the ride of a lifetime.
MarketBeat All Access Features
That means you want to buy stocks with a Zacks Rank #1 or #2, Strong Buy or Buy, which also has a Score of an A or a B in your personal trading style. The X Industry values displayed in this column are the median values for all of the stocks within their respective industry. When evaluating a stock, it can be useful to compare it to its industry as a point of reference. As an investor, you want to buy stocks with the highest probability of success. The scores are based on the trading styles of Value, Growth, and Momentum.
What’s going on with AMC Entertainment?
But note, different industries have different margin rates that are considered good. And margin rates can vary significantly across these different groups. So, when comparing one stock to another in a different industry, it’s best make relative comparisons to that stock’s respective industry values.
Services
If the volume is too light, in absolute terms or for a relatively large position, it could be difficult to execute a trade. This is also useful to know when comparing a stock’s daily volume (which can be found on a ticker’s hover-quote) to that of its average volume. A rising stock on above average volume is typically a bullish sign whereas a declining stock on above average volume is typically bearish. It’s typically categorized as a valuation metric and is most often quoted as Cash Flow per Share and as a Price to Cash flow ratio.
So be sure to compare it to its group when comparing stocks in different industries. The Price to Book ratio or P/B is calculated as market capitalization divided by its book value. (Book value is defined as total assets minus liabilities, preferred stocks, and intangible assets.) In short, this is how much a company is worth. Investors use this metric to determine how a company’s stock price stacks up to its intrinsic value. AMC announced Tuesday that it raised about $250 million by issuing 72.5 million shares, sold at market value beginning in March.
The VGM Score are a complementary set of indicators to use alongside the Zacks Rank. It allows the user to better focus on the stocks that are the best fit for his or her personal trading style. The Style Scores are a complementary set of indicators to use alongside the Zacks Rank. You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security.
- Then when the stock price drops, they can buy back the shares at a lower price, return them to the lending brokerage, and make a profit on the price difference.
- Zacks’ proprietary data indicates that AMC Entertainment Holdings, Inc. is currently rated as a Zacks Rank 3 and we are expecting an inline return from the AMC shares relative to the market in the next few months.
- GameStop’s stock skyrocketed as much as 112% and AMC’s stock soared up to 129% shortly after market open, building on both stocks’ roughly 75% gains during Monday trading.
- The company was founded in 1920 by the Dubinsky Family and is headquartered in Leawood, Kansas.
A higher number means the more debt a company has compared to its capital structure. Investors like this metric as it shows how a company finances its operations, i.e., what percentage is financed thru shareholder equity or debt. A ratio under 40% is generally considered to be good.But note; this ratio can vary widely from industry to industry.
To make matters worse, AMC has high expenses — rent and interest payments alone totaled $304 million in the third quarter. In addition to declining attendance, this structure of fixed costs is the other reason AMC has lost money on the bottom line in several years. Sign-up to receive the latest news and ratings for AMC and its competitors with MarketBeat’s FREE daily newsletter. The company’s shares are soaring, making some feel like they are missing out. AMC Entertainment’s top institutional shareholders include Renaissance Technologies LLC (3.48%), IMC Chicago LLC, SG Americas Securities LLC (0.38%) and Bank of New York Mellon Corp (0.37%).
Limited operations resumed both domestically and internationally, but revenue dropped 77% in 2020 and 63 theaters closed permanently, according to AMC’s Form 10-K. Yet, the company staved off insolvency by raising $917 million in new capital, including $506 million from investors who purchased AMC shares. As of the end of 2020, AMC operated over 10,500 screens around the world.
And like the P/E ratio, a lower number is typically considered ‘better’ than a higher number. The pandemic was not the beginning of the company’s troubles, though. AMC lost money on the bottom line in four of the nine years before the health crisis. Over the years, fewer and fewer people were willing to pay the minimum of $10 per ticket for each movie and even higher prices in some areas. As a result, the movie theater industry in North America has been steadily declining.
A simple, equally-weighted average return of all Zacks Rank stocks is calculated to determine the monthly return. The monthly returns are then compounded to arrive at the annual return. Only Zacks Rank stocks included in Zacks hypothetical portfolios at the beginning of each month are included in the return calculations. Zacks Ranks stocks can, and often do, change throughout the month. Certain Zacks Rank stocks for which no month-end price was available, pricing information was not collected, or for certain other reasons have been excluded from these return calculations.
And within the M Industry, it might further be delineated into the X Industry group called Banks Northeast. This allows the investor to be as broad or as specific as they want to be when selecting stocks. The Growth Scorecard evaluates sales and earnings growth along with other important growth measures. This includes measuring aspects of the Income Statement, Statement of Cash Flows, the Balance Sheet, and more.
But, typically, an aggressive growth trader will be interested in the higher growth rates. Like the earnings yield, which shows the anticipated yield (or return) on a stock based on the earnings and the price paid, the cash yield does the same, but with cash being the numerator instead of earnings. For example, a cash/price ratio, or cash yield, of .08 suggests an 8% return or 8 cents for every $1 of investment. AMC Entertainment has taken a major hit to its operations over the past year due to the coronavirus pandemic, and it’s only narrowly avoided bankruptcy at the moment.
When any company experiences an extreme stock-price jump, that is often accompanied by some significant news event that justifies the rise. If there is no real corporate news involved, it often means something isn’t right. A big jump in price is especially worrisome when it involves a company that has been struggling financially. Earnings estimate revisions are the most important factor influencing stocks prices. It’s an integral part of the Zacks Rank and a critical part in effective stock evaluation. If a stock’s EPS consensus estimate is $1.10 now vs. $1.00 the week before, that will be reflected as a 10% change.
Since AMC generates nearly all of its revenue from people visiting theaters in person, the coronavirus pandemic was a catastrophe. What’s more, AMC still had to come up with the rent payments on its theaters and interest payments to its lenders. Management has since negotiated some delays to those payments, but they are still accumulating.
These funds contain hundreds of companies, so opting for index funds or ETFs rather than individual stocks gives you more diversification within your portfolio. You can also usually designate if you want to place a limit or market order. Market orders go through immediately during normal trading hours at the current price, while limit orders are processed only when the stock reaches a particular price that you specify.
Meanwhile, the only noticeable upgrade in movie theaters has been replacing cloth chairs for leather power reclining seats — an improvement, to be sure. At the same time the quality difference is narrowing, the price difference is expanding. First, it’s important to note the company’s rising stock price has little to do with its operating performance.
A positive change in the cash flow is desired and shows that more ‘cash’ is coming in than ‘cash’ going out. Cash Flow per share ($/share) calculates the amount of incoming cash vs. the amount of outgoing cash for a company. It’s then divided by the number of shares outstanding to determine how much cash is generated per share. While AMC will likely continue to rebound in the near term as the world recovers from the pandemic, the company’s long-term prospects are not bright. The rise of streaming services is likely to keep movie theater attendance in perpetual decline, and AMC’s high fixed costs could keep losses accumulating on the bottom line for several quarters to several years.