- Kimberly Clark declined 2% in an otherwise buoyant trading week. It fell short of analyst estimates in Friday morning's earnings report. Adding insult to injury, it also lowered its outlook for the entire fiscal year. I guess we did load up on paper products last year.
- Tootsie Roll rose 2% for the week. It posted better-than-expected quarterly results.
- Finally, Osprey Bitcoin Trust rose 9% last week, nearly gaining back what it lost a week earlier. It was a good week for cryptocurrency investments, but the single-asset crypto trust does not deserve to be trading at a 37% premium to its multiple.
The three stocks averaged a 3% gain for the week. The S&P 500 climbed 2% higher, so I lost. This ends my streak of four consecutive winning weeks in a row. Right now, I see AMC Entertainment Holdings (AMC -1.70%), Trivago (TRVG 3.33%), and Imax (IMAX 2.22%) as vulnerable investments in the near term. Here's why I think these are three stocks to avoid this week.
I've tried to give the country's leading multiplex operator the benefit of the doubt. I've written articles praising the way that CEO Adam Aron has used his company's meme stock status to turn its growing number of retail investors into customers. Unfortunately, it's starting to seem as if it won't be enough.
AMC stock enters the new trading week trading 49% below the all-time high it hit in early June, and instead of a coming-out party this summer, the multiplex industry is starting to find movie buffs going back inside. Box office receipts in the country for all exhibitors over the weekend failed to top $70 million, making it the weakest weekend of the summer. Two years ago, domestic movie theaters raked in more than $155 million in ticket sales during the same weekend.
A lack of content was the initial excuse for AMC and its peers reopening to light crowds, but now that we've seen anticipated releases drop off quickly after their opening weekend, the momentum is not encouraging. Going to the movies is a summertime staple, but just 2% of us went to a multiplex this weekend.
Travel is another industry that perhaps got too much credit as a reopening play earlier this year. Trivago traded as high as $5.88 in January, and like AMC, it has also shed roughly half of its peak value.
Trivago is a popular portal for hotel listings. There's a lot to like about its massive worldwide catalog of properties, but the travel market isn't exactly built for globe-trotters just yet. The company is based out of Europe, and several countries overseas continue to have tight travel restrictions.
Trivago reports on Thursday. The year-over-year comparisons will be kind, of course. However, analysts still see it posting its sixth consecutive quarterly deficit. The $83.8 million that Wall Street pros are targeting on the top line would be 67% less than where its top line was for the same three-month period in 2019.
Imax joins Trivago as one of the hundreds of companies stepping up with fresh financials this week. The theatrical experience super-sizer reports on Tuesday afternoon.
The company is in better shape than AMC in terms of valuation and fundamentals. Revenue this year is only expected to be 40% below where it was in 2019, and by next year it should be at just 10% of its peak 2019 form. For comparison's sake, analysts see AMC's top line this year clocking in 56% below 2019, recovering to 12% in 2022.
The relative success stems largely from Imax's global reach, where the movie industry hasn't been disrupted as badly by digital distribution. However, Imax has the same problem as AMC in that even the blockbusters that flock to the Imax format are fading quickly after their premieres. It has also fallen short of Wall Street profit targets in two of the past three quarters.
If you're looking for safe stocks, you aren't likely to find them in AMC, Trivago, and Imax this week.