A Pair of Stock To Put On Your Watchlist: AMC Entertainment Holdings Inc. (AMC), Mallinckrodt plc (MNK)

AMC Entertainment Holdings Inc. (NYSE: AMC) shares are -25.28% down in the year-to-date (YTD) period and have moved 4.24% or $0.22 higher in the latest trading session. However, stock’s trailing 12-month performance remains nearly +177.44% lower. Comparatively, the stock is -30.46% down YTD and 5.87% over the trailing 3-month period. If we look at the shorter duration, its week performance is -3.39% and 35.25% over the month.

Analyst Recommendations

On May 27, 2020, MKM Partners recommended the AMC stock is a Neutral, while earlier, Credit Suisse had Downgrade the stock as a Underperform on June 29, 2020. 10 analysts offering the recommendations for the stock have a consensus rating of 3.40 to suggest that the AMC stock is a “Hold. 3 of the 10 analysts rate the stock as a “Sell”, while 0 has rated it as “Underweight”. 0 recommend buying, with 0 rating it as an Overweight.

The stock currently trades at $5.41 and analysts tracking its performance over the next 12 months have a consensus estimate price target of $3.50. The forecasts give the AMC Entertainment Holdings Inc. stock a price target range of $5.00 on the higher side while at least one analyst think the stock could plunge to a low of $1.00. The two limits represent an downside potential of -8.2% or -441.0%.

Earnings Forecast

Analysts estimate the earnings to decrease -24.80% in the current quarter to -$3.98, down from the -$0.53 reported in the same quarter a year ago. For the current year, earnings should grow to an average of -$32.4, down -65.10% from -$1.44 reported last year. Analysts also offered guidance for the next financial quarter, with their average projected EPS at between -$4.03 and -$1.57. Wall Street estimates earnings per share to be at an average of -$5.22 for the next year.

Insider Transactions Summary

According to SEC data, total insider shares purchases at the company stands at 20 over the last 12 months, while SEC filings reveal that there have been 12 insider sales over the same period. Insiders have purchases 400,010 shares while those sold by company executives and officers stand at 66,507. The last 3 months have seen insiders trade a total of 0 and 0 in purchases and sales respectively.

Mallinckrodt plc (NYSE:MNK), on the other hand, is trading around $1.41 with a market cap of $129.14M and analyst research firms have a negative stance on its shares. Analysts predict that the stock will reach $1.78 and spell out a more modest performance – a 20.79% return. Some analysts are even forecasting $6.36 per share in earnings this year on a short term (1 year) basis.

Let us briefly look at the Mallinckrodt plc (MNK) financials, with a focus on its operating details as indicated in its earnings report for the last quarter.

Company balance sheet and cash flow

MNK’s operating margin was negative on the trailing 12 months basis, remaining steady at -87.10%, while the operating expenses over the recent quarter were at $506.0 million. This represented a -203.9% of the company’s total revenues which amounted $166.5 million. With this in place, we can see that the company’s diluted EPS declined -$11.25 on the year-over-year period, shrinking to -$0.01 as given in the last earnings report.

In terms of the balance sheet & cash flow as of (Sep 2020), the total assets figure advanced to $9.69 billion from $10.17 billion over the previous quarter. The cash flow from operating activities totaled $224.6 million, significantly lower than the $467.4 million reported in the year-ago quarter. The company’s free cash flow for the quarter was $193.3 million.

Insider activity

Insiders have transacted a total of 20 times at Mallinckrodt plc over the last 6 months, with insider purchases undertaken 0 times and accounting for 0 shares. Insider sales totaled 104,419 shares over the same period, with these deals completed in 20 transactions. Looking at these numbers, we realize that net purchases over that period are -20.0 shares. Insiders now hold a total of 1.44M shares after the latest sales, with 0.00% net shares purchased.

Major holders

Insiders own 0.70% of the company shares, while shares held by institutions stand at 66.60% with a share float percentage of 82.07M. Investors are also buoyed by the number of investors in a company, with Mallinckrodt plc having a total of 296 institutions that hold shares in the company. The top two institutional holders are Blackrock Inc. with over 6.34 million shares worth more than $17.0 million. As of Jun 29, 2020, Blackrock Inc. held 7.50% of shares outstanding.

The other major institutional holder is Vanguard Group, Inc. (The), with the investment firm holding over 6.16 million shares as of Jun 29, 2020. The firm’s total holdings are worth over $16.5 million and represent 7.28% of shares outstanding.