One popular way to invest in global movie-theater chain AMC Entertainment (NYSE:AMC) is to buy AMC Preferred Equity Units (NYSE:APE) stock. Joining the “APE Army” can be fun and exciting. Yet, always remember that financial trading is a serious business. Be sure to time your entry point carefully and watch for $2 as a key level with APE shares.
First and foremost, anyone considering investing in AMC Entertainment or APE needs to understand the risks involved. Volatility can strike at any given moment. Furthermore, AMC Entertainment has a considerable long-term debt load and isn’t favored by analysts.
So, tread carefully and trade cautiously. That said, it’s still possible to invest in APE shares and in AMC Entertainment if you use proper timing and position sizing. So, let’s talk about some recent developments with AMC Entertainment and see if we can formulate a trading strategy for 2023.
APE Stock Has Been Going Nowhere Fast
Have the meme-stock traders abandoned AMC Entertainment? This may indeed be the case, as APE stock has basically flat-lined for the past three months.
AMC Entertainment announced a $3 theater ticket promotion to help increase its foot traffic, but that didn’t seem to boost investor sentiment. The company also recorded its busiest weekend of 2023 in April and an expansion of its branded popcorn to 2,600 Walmart (NYSE:WMT) stores. But again, these positive developments didn’t move the needle on Wall Street.
Meanwhile, investors who expected an APE stock short squeeze during the past several months have undoubtedly been disappointed. Does this mean it’s time to throw in the towel on AMC Entertainment and the “APE Army”?
Reasons to Still Believe in AMC Entertainment
I wouldn’t give up on AMC Entertainment yet. For one thing, the company demonstrated impressive revenue growth in 2023’s first quarter. Moreover, AMC Entertainment reduced its net earnings loss.
Additionally, Spider-Man: Across the Spider-Verse pulled in $120.5 million in a single weekend. Thus, moviegoers are still coming out to see popular films, and AMC Entertainment can generate strong revenue under the right conditions.
Plus, AMC Entertainment CEO Adam Aron recently celebrated a strong month for concession-stand food and beverage sales. Here’s what Aron tweeted:
“3-3-3! After a 3-year stretch where we needed more films, happily we are 3 weeks into a 3 month period with one huge movie after another. Apparently our guests are coming to see movies hungry and thirsty. Food/Bev sales per patron in U.S. in May —– the highest month EVER for AMC!”
That’s a notable achievement, and the “APE Army” should be encouraged by Aron’s enthusiasm as well as by AMC Entertainment’s pickup in food and beverage sales.
Here’s the Right Buy Price for APE Stock
Being a shareholder in APE or AMC Entertainment involves risks. The meme-stock traders seem to be disinterested lately. However, the aforementioned positive developments are definitely bullish for AMC Entertainment.
Financial traders should want to see some signs of life, along with heavier trading volume, before hitting the “buy” button. Therefore, a smart strategy would be to take a position in APE stock only after it breaks above $2. Then, prepare for a wild ride — but at least you won’t be alone, as the “APE Army” is strong and growing.
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.