Shares of AMC are not acting right. The stock barely rallied at all last month, as its relative strength ratio, which compares its performance against that of the S&P 500, did poorly. I know there was excitement among small traders in August, as it became one of the most traded stocks for a few days on Fidelity, but that simply was a mirage that trapped a lot of people.
Take a look at the chart.
Is the stock cheap?
Well, it has a market cap of $6.73 billion and outstanding debts of over $10 billion and cash on hand of $965 million. The company is bleeding cash, with an annualized operating cash flow of -$493 million. When the stock went up in August I doubt those buying to chase the action had any clue of any of that, but in the long run fundamentals do matter.
This is a stock to avoid.
What you want to be trading and buying are stocks that outperform the S&P 500.
What are you trading now?
Let us know in the comment box below.
-Mike
