Some skeptical traders wouldn’t touch AMC Entertainment (NYSE:AMC) stock with a 10-foot pole. Perhaps they’re unhappy because the company issued a large number of AMC Preferred Equity Units (NYSE:APE). However, the AMC share price has come down so much that it should now be attractive to value hunters. Besides, the company has a surprisingly large number of well-heeled institutional investors.
Just a few years ago, people on Wall Street primarily thought of AMC Entertainment as a global movie-theater chain. Then, a flurry of notable events happened: Covid-19 upended the movie-theater market, the meme-stock trade caught on, and AMC Entertainment CEO Adam Aron became the pied piper of a loyal group of investors known as “apes.”
After all of that, you might conclude that only small-scale amateurs invest in AMC Entertainment. Yet, a glance at the data actually proves otherwise.
5 Investors Betting Big on AMC Stock
You might be surprised to learn that 28.4% of AMC Entertainment shares are held by institutions. Furthermore, the list of institutional investors (as of June 29, 2022) includes some names that ought to be quite familiar.
- Vanguard: 95.18 million AMC shares, which comprise 18.42% of the outstanding shares.
- BlackRock (NYSE:BLK): 51.77 million shares, or 10.02% of the outstanding shares.
- State Street (NYSE:STT): 20.53 million AMC shares, which equates to nearly 4% of the outstanding shares.
- Goldman Sachs (NYSE:GS): 5.98 million shares, or 1.16% of AMC’s outstanding shares.
- Bank of America (NYSE:BAC): 5.42 million AMC shares, which translates to 1.05% of the company’s outstanding shares.
AMC Stock Is Low Enough to Buy Now
That’s an impressive list of big bankers betting on AMC Entertainment. Aren’t they disappointed that the company chose to issue so many APE shares, though?
In case you didn’t get the memo, AMC stock dove after the company filed to issue as many as 425 million APE shares (i.e., the preferred equity units). This reinforced the skeptics’ notion that Aron is willing to do anything to raise capital, even if it raises share-dilution concerns.
This widespread sense of pessimism and anxiety caused the AMC Entertainment share price to plumb new depths recently. A widely read article from the Wall Street Journal only added fuel to the proverbial dumpster fire.
Consequently, AMC stock traded at a bargain-basement price of $6 in mid-October. Bear in mind, the stock’s 52-week range is $5.47 to $45.95.
So, there seems to be a whole lot more room above than below. Of course, a stock that has fallen can always fall further (unless it’s at zero).
Still, if AMC Entertainment posts positive earnings surprises in the upcoming quarters, there’s the potential for swift and powerful share-price appreciation. It’s apparently a bet that some big banks are willing to take – so just maybe, you could consider holding a stake.
On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.