And welcome back to Roy Exchange. As we close in on the 6 a. m.hour, a check of a few big stories that we are following this morning. Treasury Secretary Scott Besson says he's not forecasting a recession next year. Speaking NBC's Meet the Press yesterday, Besson acknowledges that there are some weak spots when it comes to growth.Clearly, h housing has been struggling and the you so interest rate sensitive sectors have been in a recession. And you know the other thing that was not helpful Kristen was this th ...

Core Insights - Retail traders have significantly driven the share prices of Fannie Mae and Freddie Mac, which have increased over 500% since Donald Trump's election, but are now experiencing volatility as investors flee amid broader market instability [1][5]. Group 1: Market Dynamics - Recent selloffs in equity markets and losses in cryptocurrency have impacted the share prices of Fannie Mae and Freddie Mac, with a notable drop of over 10% attributed to forced liquidations in the crypto market [2][3]. - Bill Ackman highlighted that the exposure of Fannie and Freddie to crypto is not on their balance sheets but rather through their shareholder bases, suggesting that leveraged crypto investors are selling other assets to cover margin calls [3][4]. Group 2: Investment Sentiment - The shares of Fannie Mae and Freddie Mac have surged six-fold since before Trump's election, driven by expectations that the privatization process will be overseen by Bill Pulte, although specific details and timing remain unclear [5]. - The volatility of Fannie Mae and Freddie Mac shares is reminiscent of the meme-stock phenomenon, with significant price swings occurring due to limited liquidity and trading restrictions since their delisting from the New York Stock Exchange in 2010 [6][7]. Group 3: Future Outlook - Ackman has been a long-time advocate for investing in Fannie Mae and Freddie Mac, asserting that their stocks are undervalued and will rise once the government reduces its stakes, although he cautioned that the process will take considerable time [8].

Earnings & Valuation - AMC Entertainment reported gross revenue of $4.87 billion, with a net income of -$352.60 million and an earnings per share (EPS) of -$1.41, resulting in a price-to-earnings (P/E) ratio of -1.56 [2][3] - Pursuit Attractions and Hospitality generated gross revenue of $441.14 million, with a net income of $368.54 million and an EPS of $12.50, leading to a P/E ratio of 2.68 [2][3] Profitability - AMC Entertainment has a net margin of -7.39%, a return on equity (ROE) of N/A, and a return on assets (ROA) of -4.07% [4] - Pursuit Attractions and Hospitality boasts a net margin of 51.67%, an ROE of 21.30%, and an ROA of 11.41% [4] Analyst Ratings - AMC Entertainment has 2 sell ratings, 0 hold ratings, 6 buy ratings, and 1 strong buy rating, with a consensus target price of $3.26, indicating a potential upside of 48.11% [6] - Pursuit Attractions and Hospitality has 0 sell ratings, 0 hold ratings, 1 buy rating, and 3 strong buy ratings, with a consensus target price of $33.67, indicating a potential upside of 0.55% [6] Risk and Volatility - AMC Entertainment has a beta of 1.05, indicating it is 5% more volatile than the S&P 500 [7] - Pursuit Attractions and Hospitality has a beta of 1.76, indicating it is 76% more volatile than the S&P 500 [7] Institutional & Insider Ownership - 28.8% of AMC Entertainment shares are held by institutional investors, while 89.9% of Pursuit Attractions and Hospitality shares are held by institutional investors [8] - 0.4% of AMC Entertainment shares are held by company insiders, compared to 0.7% for Pursuit Attractions and Hospitality [8] Summary - Pursuit Attractions and Hospitality outperforms AMC Entertainment in 12 of the 14 factors compared between the two stocks [9]

Core Viewpoint - The optimism surrounding AMC Entertainment and the movie theater industry does not align with the current reality, as the industry faces significant challenges and has not shown signs of a full recovery since the pandemic [1][2]. Industry Summary - The CEO of AMC, Adam Aron, expressed a bullish outlook, predicting that the fourth quarter box office will be the highest in six years and that the 2026 box office will be significantly larger than in 2025 [2]. - Despite this optimism, the theater business has been permanently damaged, with AMC not turning a net profit since before the COVID-19 pandemic [3][11]. - The pandemic accelerated the shift towards streaming, leading to a decline in consumer interest in theater experiences [4][7]. Company Summary - AMC's financial performance remains weak, with the company struggling to return to profitability, as evidenced by its inability to achieve a net profit in any quarter since the pandemic began [3][11]. - The average ticket sales for some films, like the latest Fantastic Four movie, indicate that while there is still demand for in-person experiences, overall attendance is significantly lower than pre-pandemic levels [5][6]. - The market capitalization of AMC is currently $1 billion, with a current stock price of $2.20, reflecting ongoing investor skepticism about the company's recovery prospects [9][10].

Group 1 - The author has been involved in the markets since elementary school and has a strong educational background in Finance and Accounting, with a focus on Investments and Financial Analysis [1] - The author has experience managing investment portfolios, including a long/short equity portfolio and two long-only portfolios as part of a student investment management group [1] - The author has completed internships at a large bank and in managing a university endowment, indicating practical experience in investment management [1] Group 2 - The article emphasizes the importance of conducting due diligence before making any investment decisions and suggests consulting with financial advisers [3] - It is noted that past performance does not guarantee future results, highlighting the inherent uncertainties in investment [4] - The article clarifies that the views expressed may not reflect those of Seeking Alpha as a whole, indicating a diversity of opinions among contributors [4]

Core Viewpoint - AMC Entertainment, once a leading meme stock, has seen its shares decline over 99% from their peak, indicating that despite a low stock price, it is not a bargain due to inflated valuations and ongoing financial struggles [3][4][6]. Company Performance - AMC's stock price has dropped over 35% in the current year and is currently trading at approximately $2.40, down from highs of over $500 in 2021 [3][5][8]. - The company has not returned to profitability under GAAP, although it is profitable based on EBITDA [8]. Valuation Metrics - AMC's EV/EBITDA ratio stands at 21, significantly higher than competitor Cinemark Holdings, which has an EV/EBITDA ratio of 8, suggesting that AMC is overvalued [9]. Market Outlook - Forecasts indicate that U.S. movie theater revenue may not recover to pre-COVID levels until at least 2029, which poses a risk to AMC's future performance [10]. - There is potential for a temporary surge in stock price following earnings reports, but this bullish sentiment may not be sustainable [10][11].

Core Insights - Proactive provides fast, accessible, and actionable business and finance news content to a global investment audience [2] - The company focuses on medium and small-cap markets while also covering blue-chip companies and broader investment stories [3] - Proactive's news team delivers insights across various sectors including biotech, mining, oil and gas, and emerging technologies [3] Technology Adoption - Proactive is committed to adopting technology to enhance workflows and content production [4] - The company utilizes automation and software tools, including generative AI, while ensuring all content is edited and authored by humans [5]

Core Insights - AMC Entertainment Holdings reported third-quarter results that exceeded revenue expectations, indicating a positive trend in revenue generation [1] - The results also revealed a conflict between operational improvements and increasing losses, suggesting challenges in achieving profitability despite revenue growth [1] Financial Performance - The company achieved revenue that surpassed market expectations, reflecting a strong performance in the third quarter [1] - Despite the revenue beat, the mounting losses indicate that operational efficiencies have not yet translated into net profitability [1]

Core Insights - AMC Entertainment reported a quarterly loss of $0.21 per share, which was worse than the Zacks Consensus Estimate of a loss of $0.19, and compared to a loss of $0.04 per share a year ago, indicating an earnings surprise of -10.53% [1] - The company generated revenues of $1.3 billion for the quarter ended September 2025, surpassing the Zacks Consensus Estimate by 5.32%, although this was a decrease from year-ago revenues of $1.35 billion [2] - AMC shares have declined approximately 36.9% year-to-date, contrasting with the S&P 500's gain of 15.1% [3] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is -$0.01 on revenues of $1.42 billion, and for the current fiscal year, it is -$0.60 on revenues of $4.91 billion [7] - The estimate revisions trend for AMC Entertainment was mixed prior to the earnings release, resulting in a Zacks Rank 3 (Hold), suggesting the stock is expected to perform in line with the market in the near future [6] Industry Context - The Leisure and Recreation Services industry, to which AMC belongs, is currently ranked in the top 31% of over 250 Zacks industries, indicating a favorable outlook compared to the bottom 50% [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5]

Financial Data and Key Metrics Changes - AMC Entertainment reported revenue of $1.3 billion and adjusted EBITDA of $122 million for Q3 2025, exceeding Wall Street expectations [4][5] - The consolidated admissions revenue decreased by only 3.9%, while domestic admissions revenue fell by 5%, reflecting a significant market share growth [14] - The consolidated revenue performance increased by 7.5% year-over-year and is now 47% above pre-pandemic levels from Q3 2019 [14][15] - The contribution margin per patron grew by 9.2% compared to the prior year and is approximately 54% higher than in 2019 [7][15] Business Line Data and Key Metrics Changes - U.S. operations achieved domestic adjusted EBITDA of $111 million, nearly $4 million more than in Q3 2019, despite selling 31% fewer tickets [15] - Food and beverage revenue per patron increased by 60.5% compared to Q3 2019, while admissions revenue per patron rose by 33.8% [14][15] - Odeon operations in Europe faced a challenging environment, with attendance down 11.4% year-over-year, but revenue per patron increased by 13% [16] Market Data and Key Metrics Changes - AMC's market share in the U.S. box office increased to approximately 24%, significantly outperforming Regal and Cinemark, which both hold 15% [8][9] - In the U.S. market, AMC's share is 27% when excluding Canada, with Regal and Cinemark at 16% each [8] Company Strategy and Development Direction - AMC is focused on capitalizing on the anticipated box office growth, with expectations for a strong fourth quarter and a robust film slate in 2026 [6][10] - The company has successfully completed capital markets transactions to strengthen its financial foundation, including refinancing $173 million of debt and equitizing $183 million of exchangeable debt [10][18] - AMC is exploring partnerships with streaming services like Netflix and enhancing its premium large format offerings to attract more customers [25][28] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in a strong fourth quarter, driven by upcoming blockbuster releases, and believes the 2026 box office will be significantly larger than in 2025 [6][12] - The company noted that the industry-wide box office is expected to reach the highest fourth quarter in six years, with a projected $10 billion pace since April 1, 2025 [12][19] - Management emphasized the importance of maintaining operational efficiencies and enhancing the guest experience to sustain growth [18][19] Other Important Information - AMC's innovative marketing strategies and loyalty programs, such as the A-List program, have contributed to increased patronage and revenue [42][63] - The company is actively exploring the use of AI to improve operational efficiency and enhance customer experiences [32][33] Q&A Session Summary Question: Discussion on concessions and ticket prices - Management highlighted that ticket prices have risen significantly, with the consolidated ticket price reaching $12.24, the highest in history, and emphasized the importance of premium pricing options [39][40] Question: Sustainability of strong performance metrics - Management expressed confidence in sustaining and growing key performance metrics, attributing past successes to strategic focus and operational improvements [55][56] Question: Comments on the M&A environment - Management noted that while the current cash reserves are earmarked for strengthening the balance sheet, they are monitoring the M&A environment for potential opportunities [60][61]