Shares of movie theater giant AMC Entertainment skyrocketed by more than 300% on Wednesday as individual investors piled into the stock, forcing hedge funds to scramble to cover their losses on short positions.
Shorting occurs when an investor borrows shares and sells them to others, a position taken when the investor believes the share price is going to decline. The short seller hopes to buy shares back at a lower price to settle the loan, pocketing the difference.
The move in AMC seems to be driven by the same Reddit chat board that has helped drive GameStop to new highs this week and is pushing other heavily shorted stocks higher.
It's important to note that pushing stocks in this way leads to a lot of volatility, and it's impossible to tell if the stock will continue to rise or if it will suddenly drop sharply. Casual investors should steer clear or be prepared to keep a close watch on any positions they take.
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Since the stock market crash in March caused by coronavirus, AMC Entertainment's stock price has had significant positive movement.
Its last market close was $44.2, which is 83.12% up on its pre-crash value of $7.46 and 2,166.67% up on the lowest point reached during the March crash when the stocks fell as low as $1.95.
If you had bought $1,000 worth of AMC Entertainment stocks at the start of February 2020, those stocks would have been worth $488.38 at the bottom of the March crash, and if you held on to them, then as of the last market close they'd be worth $6,852.77.
The technical analysis gauge below displays real-time ratings for the timeframes you select. This is not a recommendation, however. It represents a technical analysis based on the most popular technical indicators: Moving Averages, Oscillators and Pivots. Finder might not concur and takes no responsibility.
This chart is not advice or a guarantee of success. Rather, it gauges the real-time recommendations of three popular technical indicators: moving averages, oscillators and pivots. Finder is not responsible for how your stock performs.
|52-week range||$1.91 - $72.62|
|50-day moving average||$39.88|
|200-day moving average||$29.31|
|Wall St. target price||$5.44|
|Dividend yield||$0.03 (0.07%)|
|Earnings per share (TTM)||$-9.68|
|1 week (2021-09-10)||-11.88%|
|1 month (2021-08-19)||30.69%|
|3 months (2021-06-18)||-25.41%|
|6 months (2021-03-19)||217.30%|
|1 year (2020-09-18)||679.54%|
|2 years (2019-09-19)||310.40%|
|3 years (2018-09-19)||114.04%|
|5 years (2016-09-19)||38.82%|
Valuing AMC Entertainment stock is incredibly difficult, and any metric has to be viewed as part of a bigger picture of AMC Entertainment's overall performance. However, analysts commonly use some key metrics to help gauge the value of a stock.
AMC Entertainment's "price/earnings-to-growth ratio" can be calculated by dividing its P/E ratio by its growth – to give 1.42. A low ratio can be interpreted as meaning the shares offer better value, while a higher ratio can be interpreted as meaning the shares offer worse value.
The PEG ratio provides a broader view than just the P/E ratio, as it gives more insight into AMC Entertainment's future profitability. By accounting for growth, it could also help you if you're comparing the share prices of multiple high-growth companies.
AMC Entertainment's EBITDA (earnings before interest, taxes, depreciation and amortisation) is $45.8 million.
The EBITDA is a measure of a AMC Entertainment's overall financial performance and is widely used to measure a its profitability.
|Revenue TTM||$875 million|
|Gross profit TTM||$-885,400,000|
|Return on assets TTM||-9.26%|
|Return on equity TTM||-9999999%|
|Market capitalisation||$22.8 billion|
TTM: trailing 12 months
There are currently 95.9 million AMC Entertainment shares held short by investors – that's known as AMC Entertainment's "short interest". This figure is 11.8% up from 85.8 million last month.
There are a few different ways that this level of interest in shorting AMC Entertainment shares can be evaluated.
AMC Entertainment's "short interest ratio" (SIR) is the quantity of AMC Entertainment shares currently shorted divided by the average quantity of AMC Entertainment shares traded daily (recently around 92.3 million). AMC Entertainment's SIR currently stands at 1.04. In other words for every 100,000 AMC Entertainment shares traded daily on the market, roughly 1040 shares are currently held short.
However AMC Entertainment's short interest can also be evaluated against the total number of AMC Entertainment shares, or, against the total number of tradable AMC Entertainment shares (the shares that aren't held by "insiders" or major long-term shareholders – also known as the "float"). In this case AMC Entertainment's short interest could be expressed as 0.19% of the outstanding shares (for every 100,000 AMC Entertainment shares in existence, roughly 190 shares are currently held short) or 0.1876% of the tradable shares (for every 100,000 tradable AMC Entertainment shares, roughly 188 shares are currently held short).
Such a low SIR usually points to an optimistic outlook for the share price, with fewer people currently willing to bet against AMC Entertainment.
We're not expecting AMC Entertainment to pay a dividend over the next 12 months.
Over the last 12 months, AMC Entertainment's shares have ranged in value from as little as $1.91 up to $72.62. A popular way to gauge a stock's volatility is its "beta".
Beta is a measure of a share's volatility in relation to the market. The market (NYSE average) beta is 1, while AMC Entertainment's is 1.3297. This would suggest that AMC Entertainment's shares are more volatile than the average for this exchange and represent, relatively-speaking, a higher risk (but potentially also market-beating returns).
AMC Entertainment Holdings, Inc. , through its subsidiaries, involved in the theatrical exhibition business. The company owns, operates, or has interests in theatres. As of March 12, 2021, it operated approximately 1000 theatres and 10,700 screens in the United States and internationally. The company was founded in 1920 and is headquartered in Leawood, Kansas. .
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