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Is AMC Entertainment Holdings (AMC) a Smart Long-term Buy?

Alex Smith
·3 min read

Mittleman Brothers recently released its Q3 2020 Investor Letter, a copy of which you can download here. The Mittleman Global Value Equity Fund – Class P declined 1.4% net of fees (AUD) in the third quarter of 2020, versus a gain of 3.9% in the MSCI ACW Index. You should check out Mittleman Brothers' top 5 stock picks for investors to buy right now, which could be the biggest winners of this year.

In the said letter, Mittleman Brothers highlighted a few stocks and AMC Entertainment Holdings Inc. (NYSE:AMC) is one of them. AMC Entertainment Holdings Inc. (NYSE:AMC) is a movie theater chain. Year-to-date, AMC Entertainment Holdings Inc. (NYSE:AMC) stock lost 58.8% and on November 17th it had a closing price of $2.98. Here is what Mittleman Brothers said:

"While AMC Entertainment Holdings (AMC US) has moved closer to the zone of insolvency and clearly requires further financing to bridge the remaining gap between now and whenever re-opening takes hold, they should be able to raise additional capital through equity sales and asset sales, with the Nordic theatre chain the most likely major liquidity source. It is worth nothing that analysts were confidently predicting imminent bankruptcy for AMC back in April when the stock fell from US$7.78 on 20 February to US$1.95 on 13 April, but it raised significant capital shortly thereafter and the stock was back to US$7.71 on 2 September before the most recent panic attack. MIM thinks AMC will make it through to 2021 and thus multiples of the current stock price will be achieved for those willing to endure the volatility in the interim."

Fun Activities for Work Parties
Fun Activities for Work Parties

Fer Gregory/Shutterstock.com

In Q1 2020, the number of bullish hedge fund positions on AMC Entertainment Holdings Inc. (NYSE:AMC) stock decreased by about 26% from the previous quarter (see the chart here), so a number of other hedge fund managers don't believe in AMC's growth potential. Our calculations showed that AMC Entertainment Holdings Inc. (NYSE:AMC) isn't ranked among the 30 most popular stocks among hedge funds.

The top 10 stocks among hedge funds returned 185% since the end of 2014 and outperformed the S&P 500 Index ETFs by more than 109 percentage points. We know it sounds unbelievable. You have been dismissing our articles about top hedge fund stocks mostly because you were fed biased information by other media outlets about hedge funds' poor performance. You could have doubled the size of your nest egg by investing in the top hedge fund stocks instead of dumb S&P 500 ETFs. Below you can watch our video about the top 5 hedge fund stocks right now. All of these stocks had positive returns in 2020.

Video: Top 5 Stocks Among Hedge Funds

At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 10 most profitable companies in the world to pick the best large-cap stocks to buy. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our website:

Disclosure: None. This article is originally published at Insider Monkey.