Meme stock AMC Entertainment (NYSE:AMC) has been slumping lately partly in response to its board of directors decision to cancel plans to issue new shares. Given its bleak growth prospects, the stock looks susceptible to an extended pullback. However, in contrast, we think the surging equity markets and rapid macroeconomic recovery should help fundamentally sound stocks The Home Depot (NYSE:HD), Linde (NYSE:LIN), Lowe's Companies (NYSE:LOW), and ABB Ltd (ABB) hit fresh price highs soon. Read on.Theatrical exhibition company AMC Entertainment Holdings, Inc. (AMC) is one of the most popular meme stocks of all time. Shares of AMC have gained 2,028.3% year-to-date, and 358.1% over the past three months. The company undertook aggressive marketing campaigns to extend its rally, such as announcing free popcorn and special screening offers to retail shareholders in June. However, the company scrapped its plans to issue 25 million additional shares yesterday, which caused its stock’s price to decline.
AMC grabbed retail investors’ attention initially because it was heavily shorted by institutional investors and hedge funds worldwide. But the company’s bleak earnings growth prospects make its current rally unsustainable. Analysts expect AMC’s EPS to decline at a rate of 217% per annum over the next five years.
However, with the improving job market and rising consumer spending, coupled with surging equity markets, we think make fundamentally sound stocks The Home Depot, Inc. (HD), Linde plc (LIN), Lowe's Companies, Inc. (LOW), and ABB Ltd (ABB) well positioned to soar in the coming months.