Is Index Investing Turning Into A Bubble? This Billion Dollar Hedge Fund Thinks So (And Has The Data To Prove It)

 AMC Entertainment Holdings Inc (NYSE:AMC)

– Shares Held By Horizon Kinetics (as of September 30): 233,936

– Value of Holding (as of September 30): $12.13 Million

Horizon Kinetics increased its stake in AMC Entertainment Holdings Inc (NYSE:AMC) nearly ten-fold during the third quarter. Last year, shares of the cable network provider plunged by more than 30% and its earnings growth remained muted. According to Horizon Kinetics, that’s because the company “is in a period between blockbuster programs.” The firm is of the opinion that if AMC can create another blockbuster like ‘Mad Men’, ‘Breaking Bad’ etc., its earnings will rise significantly. Additionally, if the international cable business of the company manages to achieve the profitability level of its U.S. operations in the future, Horizon Kinetics argues that the company’s EPS could be closer to $7. Assuming that those earnings are priced at a P/E multiple of 15x, AMC’s stock could trade at $109, which is almost double the levels it currently trades at.

AMC Entertainment Holdings Inc (NYSE:AMC) is expected to report its fourth quarter results later this month and the present consensus of analysts is for EPS of $1.28 on revenue of $711.71 million. For the same quarter of the previous year, it had reported EPS of $1.23 on revenue of $678.95 million.

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Disclosure: None