Keypoints:
I nstitutional investors are buying and increasing their stake in AMC Entertainment Holdings Inc. AMC, but is it a smart decision for the average investor?
AMC Entertainment Holdings Inc. has been making headlines recently as the stock jumps 0.80% on Friday to $5.06 against a previous-day closing price of $5.02. Despite a steep decline at the end of last year, AMC's share price has increased 6.01% from its January 6th price of $3.83.
However, it is still a long way from its all-time high of $62.49 on June 2, 2021. AMC recently announced a $110 million equity capital raise.
One of the indicators that investors use to determine whether they will profit from a stock is its stock performance. AMC's stock performance has been up-trending over the past week, with a rise of 31.43%.
However, the stock has dropped -11.54% over the past month, -16.23% over the past three months, and -46.41% over the past six months. The stock lost -63.75% in the past year, while it has gained 24.32% so far this year.
A look at the trailing 12-month EPS for AMC yields -1.37 with Next year EPS estimates of -0.41. For the next quarter, that number is -0.16. This implies an EPS growth rate of 93.20% for this year and 64.20% for next year.
AMC Entertainment Holdings Inc. AMC institutional ownership stands at 28.49%, with The Vanguard Group, Inc. being the largest shareholder at 9.33%. Other institutions hold 3.83% of AMC, while mutual funds hold 14.80% and individual shareholders hold 11.71%. It's worth noting that the largest institutional shareholders, The Vanguard Group and BlackRock Fund Advisors, both hold significant stakes in AMC.
Seven analysts currently follow AMC, with 0 recommending a BUY, 4 suggesting a SELL, and 3 believing the stock is worth HOLDING. The average target price for AMC over the next 12 months is $2.39, which represents a decline of -52.77% from current levels.
Insider trading activity for AMC stock has been mixed over the past three months, with no buys and no sells reported. However, over the past year, the number of buy transactions has increased while the number of sell transactions has risen, indicating that insiders are not necessarily bullish on the stock. Additionally, the total number of shares bought during that period was less than the number of shares sold, further suggesting that insiders may not be confident in the stock's future performance.
Next, let's examine the activity of hedge funds and other institutional investors. According to a recent filing, these investors have been adding to or reducing their stakes in AMC stock.
Bank of New York Mellon Corp, for example, lifted its stake in shares of AMC by 0.6% during the 3rd quarter, while Toroso Investments LLC boosted its holdings in shares of AMC by 52.4% during the same period. On the other hand, Balyasny Asset Management LLC and Neuberger Berman Group LLC increased their stake in shares of AMC by 442% and 12.9%, respectively. State Street Corp also increased its holdings in AMC by 0.4%.
While these moves indicate that some institutional investors believe that AMC stock has potential, it's important to note that institutional investors are known to have a longer-term investment horizon and may not be swayed by short-term fluctuations in the stock market.