Investment management company Bireme Capital recently released its fourth-quarter 2022 investor letter. A copy of the same can be downloaded here. In the fourth quarter, the fund returned 34.7% net of fees compared to a 7.6% return for the S&P 500. The strategy has compounded at 27.4% annualized, besting the market by 16% a year. In addition, you can check the top 5 holdings of the fund to know its best picks in 2022.
Bireme Capital highlighted stocks like AMC Entertainment Holdings, Inc. (NYSE:AMC) in the Q4 2022 investor letter. Headquartered in Leawood, Kansas, AMC Entertainment Holdings, Inc. (NYSE:AMC) engages in the theatrical exhibition business. On February 17, 2023, AMC Entertainment Holdings, Inc. (NYSE:AMC) stock closed at $5.24 per share. One-month return of AMC Entertainment Holdings, Inc. (NYSE:AMC) was -7.42%, and its shares lost 52.35% of their value over the last 52 weeks. AMC Entertainment Holdings, Inc. (NYSE:AMC) has a market capitalization of $2.69 billion.
Bireme Capital made the following comment about AMC Entertainment Holdings, Inc. (NYSE:AMC) in its Q4 2022 investor letter:
“Even the meme stocks AMC Entertainment Holdings, Inc. (NYSE:AMC) and GME declined more than 20% in the quarter after previously sidestepping the 2022 bear market. AMC’s Q3 operating results demonstrated their ongoing problems in a post-COVID world, with a net loss of $226m for the quarter and $686m on a year to date basis. The company has burned more than $700m of cash so far in 2022, partially financing this with long term debt yielding a whopping 15% to maturity.
At the current AMC share price around $4, the fully diluted market cap of the company — including the “AMC Preferred Equity” shares (whose ticker is, of course, “APE”) — is around $6b. This is despite the fact that the firm has $4.7b of net debt outstanding and generated less than $300m of EBIT even in pre-COVID times. We think it is clear that some type of restructuring will occur at AMC in the next few years. We pressed our short bet during the quarter by increasing our short position in AMC and buying a corresponding number of APE shares, which, despite being economically equivalent, trade at a massive discount for no reason. We were therefore pleased to see management announce a vote to convert APE shares into AMC shares. Though the discrepancy persists, this has reduced the discount between the two securities and created a paper profit for our clients.”
AMC Entertainment Holdings, Inc. (NYSE:AMC) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 17 hedge fund portfolios held AMC Entertainment Holdings, Inc. (NYSE:AMC) at the end of the third quarter, which was 18 in the previous quarter. In addition, please check out our hedge fund investor letters Q4 2022 page for more investor letters from hedge funds and other leading investors.
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Disclosure: None. This article is originally published at Insider Monkey.
