2-Star Stocks Poised to Plunge: AMC Networks?

Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, cable television brands operator AMC Networks (Nasdaq: AMCX  ) has received a distressing two-star ranking.

With that in mind, let's take a closer look at AMC and see what CAPS investors are saying about the stock right now.

AMC facts

Headquarters (founded)

New York (1980)

Market Cap

$3.4 billion

Industry

Cable and satellite

Trailing-12-Month Revenue

$1.3 billion

Management

CEO Joshua Sapan (since 2011)
CFO Sean Sullivan (since 2011)

Trailing-12-Month Return on Capital

18.4%

Cash/Debt

$307.8 million / $2.3 billion

Competitors

A&E Television Networks
Home Box Office

Turner Broadcasting System

Sources: S&P Capital IQ and Motley Fool CAPS.

On CAPS, 26% of the 27 members who have rated AMC believe the stock will underperform the S&P 500 going forward.

This past summer, one of those bears, fellow Fool Nathan Alderman (TMFNato), succinctly summed up the underperform case for our community:

It's run by a self-serving family that stuffs the board with relatives (all collecting paychecks for their directorship) and has an iron grip on 75% of the voting power. And the whole company seems to have been spun off only to unload a pile of debt from parent Cablevision onto the new company. AMC freely admits that it can't possibly repay that debt, which is practically a big, blinking sign to shareholders: WE WILL DILUTE YOU. Plus, its efforts to create new hit shows like Mad Men and The Walking Dead have thus far not borne fruit, and it's nickel-and-diming the hit shows it does have. Bad, bad moves from a bad, bad company.

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Fool contributor Brian Pacampara has no positions in the stocks mentioned above. The Motley Fool has no positions in the stocks mentioned above. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.


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