Momentum & Growth

Insider Financial Trading View Update For 01/06/2020

First up is AMC Entertainment Holdings Inc (NYSE:AMC).

We are finally seeing some improvement in the technical picture for $AMC. At $7, $AMC presents an attractive risk/reward play. We would buy $AMC and risk to new lows below $6.25 a share. With 56% of the float short, we will get a big short squeeze if $AMC starts running. $AMC reports earnings on February 27th, so keep that in mind.

AMC Entertainment Holdings, Inc., through its subsidiaries, involved in the theatrical exhibition business. The company owns, operates, or has interests in theatres. As of December 31, 2018, it owned, operated, or had interests in 637 theatres with a total of 8,114 screens in the United States; and 369 theatres and 2,977 screens in European markets. The company was founded in 1920 and is headquartered in Leawood, Kansas. AMC Entertainment Holdings, Inc. is a subsidiary of Dalian Wanda Group Co., Ltd.

Second, we have Macy’s Inc (NYSE:M).

$M has caught our eye. The stock does have more work to do, but it is on the verge of a breakout. We need to get above $18 to confirm, but we also believe that the lows of $14.11 are in. We believe investors and funds are going to start banking on a $M turnaround. Here’s the latest news on the $M turnaround.

  • Macy’s plans to shutter 125 department stores over the next three years.
  • It is cutting about 2,000 corporate jobs.
  • Macy’s offers fresh three-year financial targets ahead of a meeting with investors.
  • Macy’s said it plans to exit weaker shopping malls, and instead shift its focus toward opening smaller-format stores in strip centers. Macy’s has shuttered more than 100 stores since 2015.
  • Macy’s is calling 2020 a “transition year” and says it expects same-store sales to be negative, “due to the trajectory of the business over the past six months.”
  • Macy’s said Tuesday it expects revenues in fiscal 2020 to fall because of store closures. It is calling for net sales to be within a range of $23.6 billion to $23.9 billion, with same-store sales, on an owned plus licensed basis, dropping 1.5% to 2.5%. Analysts had been calling for net sales of $24.36 billion, according to a poll by Refinitiv.
  • While it hasn’t yet reported fourth-quarter and full-year earnings for 2019, Macy’s shared preliminary results ahead of its investor meeting.
  • Net sales for the fourth quarter, which includes the latest holiday season, are expected to be $8.3 billion, while net sales for fiscal 2019 are expected to be $24.5 billion, Macy’s said. It added it anticipates full-year earnings per share to be near the high-end of a prior outlook, of $2.57 to $2.77.

Here are some stats we like:

  • 28% of the float is short
  • $M trading 7x 2020 earnings , 0.22x sales, and 0.89x book.

Lastly, we like M$ stores. We shop at $M stores and we do think others do as well. We don’t see them going out of business.

As always, use protective stops and trade with caution.

Good luck to all!

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Disclosure: At the time of this writing, we have no positions in any of the stocks mentioned. We are not financial advisors. Please read our full disclaimer for more information.

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Insider Financial Trading View Update For 01/06/2020
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