Stock Analysis

Insiders Continue to Reduce Their Share in AMC Entertainment (NYSE:AMC)

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NYSE:AMC
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AMC Entertainment Holdings, Inc. ( NYSE:AMC ) will unquestionably find its place in the history books. The company that started the year in the penny stock territory rallied to over US$70 at one point – courtesy of the retail investors that punished the greed of the short-sellers.

We will take a look at the current results, outlook, and current ownership breakdown.

Q2 2021 Results 

  • GAAP EPS: -US$0.71 (beat by US$0.21)
  • Revenue: US$444.7m (beat by US$62.59m)
  • Cash reserves at June 30, 2021: US$1.81b

While the economy is recovering, AMC now operates all domestic theaters (593) and 95% of the international ones (335). However, the demand remains way off in comparison to 2019. Q2 2019 revenue was US$1.5b, over 3 times what it is now.

With a significant cash burn, the company keeps raising cash to fuel it. One analyst pointed out that the company sold 3 times more shares than movie tickets in Q2.

With the dust settling, AMC still holds a market capitalization of US$17b. At that size, we'd expect to see retail as well as institutional investors on the register.

We can zoom in on the different ownership groups to learn more about AMC Entertainment Holdings.

Check out our latest analysis for AMC Entertainment Holdings

ownership-breakdown
NYSE:AMC Ownership Breakdown August 10th 2021

What Does The Institutional Ownership Tell Us About AMC Entertainment Holdings?

AMC Entertainment Holdings already has institutions on the share registry. Indeed, they own a good stake in the company.

However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They, too, get it wrong sometimes.If multiple institutions change their view on a stock simultaneously, you could see the share price drop fast. It's, therefore, worth looking at AMC Entertainment Holdings' earnings history below. Of course, the future is what matters.

earnings-and-revenue-growth
NYSE:AMC Earnings and Revenue Growth August 10th 2021

AMC Entertainment Holdings is not owned by hedge funds. It is more likely that they hold most of the current 15.95% short percent of the float. Although the short position is far from the peak, it is still relatively high.

Our data shows that The Vanguard Group, Inc. is the largest shareholder with 7.3% of shares outstanding.Meanwhile, the second and third largest shareholders hold 5.3% and 1.3% of the shares outstanding, respectively.

A deeper look at the ownership data shows that the top 25 shareholders collectively hold less than half of the register, suggesting a large group of small holders, where no single shareholder has a majority.

Insider Ownership Of AMC Entertainment Holdings

The definition of company insiders can be subjective and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least.Company management runs the business, but the CEO will answer to the board, even if they are a member of it.

Insider ownership is positive when it signals leadership is thinking like the actual owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances.

Our information suggests that AMC Entertainment Holdings, Inc. insiders own under 1% of the company.It is a very large company, so it would be surprising to see insiders own a large proportion of the company. Though their holding amounts to less than 1%, we can see that board members collectively own US$59m worth of shares (at current prices).

However, in recent times insiders have only been selling the stock. While it is hard to blame them, it doesn't contribute to the optimistic outlook given the parabolic run. You can check the insider trading volume on our platform.

General Public Runs the Show

The general public, including retail investors, owns 77% of AMC Entertainment Holdings.This size of ownership gives investors from the general public some collective power. While this certainly offers a lot of power to the people, one should worry about any future turbulence, as the exit in case of emergency can get very crowded.

Next Steps:

We find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. Consider, for instance, the ever-present specter of investment risk. We've identified 6 warning signs with AMC Entertainment Holdings (at least 2 which are a bit unpleasant) , and understanding them should be part of your investment process.

If you would prefer to discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts .

NB: Figures in this article are calculated using data from the last twelve months, which refer to the 12 months ending on the last date of the month the financial statement is dated. This may not be consistent with full-year annual report figures.

What are the risks and opportunities for AMC Entertainment Holdings?

AMC Entertainment Holdings, Inc., through its subsidiaries, engages in the theatrical exhibition business.

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Rewards

  • Trading at 21% below our estimate of its fair value

  • Revenue is forecast to grow 7.8% per year

Risks

  • Negative shareholders equity

  • Volatile share price over the past 3 months

  • Has less than 1 year of cash runway

  • Currently unprofitable and not forecast to become profitable over the next 3 years

View all Risks and Rewards

Share Price

Market Cap

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Further research on
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Simply Wall St analyst Stjepan Kalinic and Simply Wall St have no position in any of the companies mentioned. This article is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

Stjepan Kalinic

Stjepan Kalinic

Stjepan is a writer and an analyst covering equity markets. As a former multi-asset analyst, he prefers to look beyond the surface and uncover ideas that might not be on retail investors' radar. You can find his research all over the internet, including Simply Wall St News, Yahoo Finance, Benzinga, Vincent, and Barron's.

About NYSE:AMC

AMC Entertainment Holdings

AMC Entertainment Holdings, Inc., through its subsidiaries, engages in the theatrical exhibition business.

The Snowflake is a visual investment summary with the score of each axis being calculated by 6 checks in 5 areas.

Analysis AreaScore (0-6)
Valuation4
Future Growth1
Past Performance0
Financial Health0
Dividends0

Read more about these checks in the individual report sections or in our analysis model.

Good value with concerning outlook.