AMC Entertainment and FuboTV are trading below $5 a share.
AMC is benefiting from a rise in ticket sales, and the near-term pipeline of theatrical releases is promising.
FuboTV has more than doubled this year, but things should get even better when Disney becomes a 70% shareholder in the company.
The market may be rallying, but there are still plenty of stocks trading for low price tags. Most of the stocks trading for less than $5 will stay that way. This is a risky pool of investments. However, you shouldn’t be surprise if some of the biggest gainers come from that same basket of low-priced stocks.
AMC Entertainment (NYSE: AMC) and FuboTV (NYSE: FUBO) are two stocks that can potentially deliver market-thumping returns in the coming years. Let’s take a closer look at these two stocks with market caps above $1 billion and price points below $5 that I think are worth buying in October.
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It’s been a rough few years for the country’s largest movie theater chain. AMC stock is declining sharply for the fourth consecutive year, even though 2025’s slide of 21% is tame by previous year standards. The shares have plummeted 99.6% since peaking four summers ago.
A quick look at AMC’s horror movie of a stock chart may lead you to believe that the bearish narrative for movie theater stocks is true. Folks aren’t going to the corner multiplex anymore. The improving value proposition of high-def TVs, along with the proliferation of premium streaming services, isn’t giving exhibitors a shot to stand out.
It’s a predictable tragedy, but it’s also not true. Box office receipts in the U.S. have moved higher in four of the last five years coming out of the pandemic. Year-to-date ticket sales are 4% higher than they were a year earlier.
Image source: Getty Images.
AMC’s latest quarter was promising. Revenue soared a better-than-expected 36% to $1.4 billion, as a 26% increase in attendance was enhanced by an uptick in spending per moviegoer. It nearly broke even on an adjusted basis. Analysts were bracing for a loss. Its adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) skyrocketed nearly fivefold.
There’s no excusing AMC’s missteps. Management went all in on the meme stock feeding frenzy, diluting shareholders and failing to focus on operations. Its closest publicly traded rival has been profitable for two years, with the shares nearly tripling over the past five years. However, the miscues of the past could be a curtain call for today’s opportunistic investors.
AMC may have bloated its share count when the going was good, but you can buy the stock at an enterprise value that is less than 2 times trailing revenue today. Its share count still needs to be pared back, but its long-term debt is declining for the fifth year in a row. With a strong slate of movies coming out this quarter, AMC doesn’t have a reason to fail now.
Unlike AMC, FuboTV has more than doubled this year. The provider of a sports-centric live TV streaming service soared in January when Disney (NYSE: DIS) gave Fubo a shot at a fairy-tale ending. Disney and two other media stocks were gearing up to launch a sports platform that would combine the digital assets of the three into a single package. Fubo persuaded a judge to block the launch of the service, and the three media stocks decided to settle.
They paid $220 million to Fubo for dropping the case, a surprising settlement because the three-headed sports juggernaut was disbanded days later. Disney also agreed to take a majority stake in Fubo, handing over the larger Hulu + Live TV streaming to Fubo. The combination with Disney is expected to close in the first half of next year.
The settlement fortified FuboTV’s balance sheet. The arrival of Disney’s more popular live TV streaming service should fortify the business itself next year. Disney will have a 70% stake in the company, and that should help continue to lift the profile of the fledgling platform in the eyes of the investing community. Put another way, FuboTV has a lot of ways to win this game.
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Rick Munarriz has positions in Walt Disney. The Motley Fool has positions in and recommends Walt Disney and fuboTV. The Motley Fool has a disclosure policy.
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