What is AMC's market based valuation? (A data based approach)

Summary

The speaker revisits AMC's stock valuation from a value investor's perspective, emphasizing a data-driven approach. They critique hype and misinformation, advocating for truth and transparency in the stock market. The analysis includes price-to-sales ratios, comparing AMC to similar companies, and projecting AMC's future earnings and stock price based on various metrics. The speaker shares their forecasting methodology, which has proven accurate in the past, and outlines the potential for AMC's stock to significantly increase in value, considering upcoming profits and market revaluation. They also address personal plans to offer subscription-based financial analysis on Twitter while keeping AMC discussions free.

Takeaways

• 📈 The speaker revisits AMC's stock valuation from a value investing perspective, emphasizing a data-driven approach similar to Warren Buffett's methodology.
• 🎥 The speaker differentiates between hype channels and negative channels, positioning themselves as a source of factual information amidst the sentiment sway.
• 📊 They discuss the importance of metrics like Price to Sales (P/S), Price to Earnings (P/E), and Price to Earnings to Growth (PEG) ratio for evaluating a company's value, especially for startups and turnaround stories like AMC.
• 🏷️ The speaker highlights AMC's use of price to sales as a relevant metric due to its status as a turnaround story from the pandemic's impact.
• 📉 The speaker provides a detailed analysis comparing AMC's P/S ratio to that of Cinemark and IMAX, suggesting that AMC is significantly undervalued.
• 💼 Drawing from their background in business and forecasting, the speaker shares their credibility and accuracy in predicting AMC's earnings over the past two years.
• 📊 The speaker breaks down AMC's financials, focusing on the company's heavy fixed cost model, improved operating leverage, diversified revenue streams, and reduced debt.
• 🚀 The speaker forecasts significant growth and profitability for AMC, predicting full-year profits and a path to substantial earnings by 2026.
• 🌐 They acknowledge risks such as global disruption and foreign exchange rates that could impact AMC's international earnings and valuation.
• 💬 The speaker addresses potential criticism regarding their decision to offer paid subscriptions for financial analysis, asserting their commitment to providing free AMC analysis.

Q & A

What is the main focus of the video script?

The main focus of the video script is to revisit the valuation of AMC Entertainment Holdings, Inc. (AMC) from a value investing perspective, using objective data and metrics to determine its stock price potential.

What type of investors does the speaker mention in the script?

The speaker mentions value investors, particularly citing Warren Buffett as an example, who analyze financials and determine a company's worth based on metrics and data.

What is the speaker's stance on AMC's stock?

The speaker identifies as a bull on AMC, stating that they are long on the stock and that it makes up a significant portion of their portfolio.

What does the speaker aim to provide their audience?

The speaker aims to provide factual, data-driven information that the audience can use to fact-check and make informed decisions about investing in AMC's stock.

What metrics are discussed in the script for evaluating a company's stock price?

The metrics discussed in the script include price to sales (P/S), price to earnings (P/E), and price to earnings to growth (PEG) ratios.

How does the speaker describe the use of price to sales (P/S) ratio?

The speaker describes the P/S ratio as useful for evaluating startups and turnaround stories, where a company may not yet have positive earnings but has sales growth.

What is the significance of the P/E ratio mentioned in the script?

The P/E ratio is significant as it provides a backwards view of a company's value, calculated by dividing the market cap by yearly earnings, and is generally used for companies with positive full-year earnings.

What does the speaker mean by 'fighting for truth and transparency in the stock market'?

The speaker means that they are advocating for clear, factual information and analysis in the stock market, as opposed to manipulation, hype, or misinformation that can distort stock prices and investment decisions.

What is the speaker's background in financial analysis?

The speaker has two masters in business, has worked for 21 years at a Dow Jones company, and has experience leading teams in forecasting over $2 billion a year in revenue across 15 countries.

What is the speaker's accuracy in predicting AMC's earnings?

The speaker claims to have been over 98% accurate in predicting AMC's earnings for the past nine quarters, beating Wall Street's estimates.

What assumptions does the speaker provide for their forecasts?

The speaker provides assumptions such as projected domestic box office revenues, incremental revenues from distribution and new product lines like popcorn, and the appreciation of HighCraft's stock.

What risks does the speaker identify to the forecast they provide?

The speaker identifies risks such as uncertainties in new revenue streams, global disruptions, foreign exchange rate fluctuations, and the potential impact of these factors on AMC's stock price.

What does the speaker suggest about AMC's future with regards to profits and stock price?

The speaker suggests that AMC is expected to have significant growth in profits and that the stock price should reflect this growth, implying that the current stock price is undervalued.

What is the speaker's personal plan regarding providing financial analysis?

The speaker plans to offer financial analysis on other companies through subscriptions on Twitter, while keeping AMC analysis free and focusing on providing value to subscribers.