Theatrical exhibitor AMC Entertainment (AMCAMC) reported its highest December night opening ever, with a record 1.1 million people attending the ‘Spider-Man: No Way Home’ premiere on December 17. The Leawood, Kans.-based company’s non-GAAP total revenues for the third quarter, ended September 30, 2021, increased 532.3% year-over-year to $755.60 million. However, its net loss came in at $224.20 million compared to a $905.80 million loss in the year-ago period.

The popular meme stock has gained 1,252.8% year-to-date to close yesterday’s trading session at $28.68. However, it is currently trading 60.5% below its 52-week high of $72.62, which it hit on June 2, 2021. Wall Street analysts expect the stock to hit $8.17 in the near term, which indicates a potential 71.5% decline. AMC’s shares are also trading at an expensive valuation. In terms of forward EV/S and P/S, AMC’s respective 9.98x and 5.91x are higher than the 2.44x and 1.74x industry averages. So, the stock is best avoided now.

While not all meme stocks are good bets, popular meme stocks Caterpillar Inc. (CAT), Micron Technology, Inc. (MU), and Gartner, Inc. (IT) possess sound fundamentals. So, instead of AMC, we think it could be wise to scoop up their shares now.

Caterpillar Inc. (CAT)

Peoria, Ill.-based CAT manufactures construction and mining equipment, diesel and natural gas engines, industrial gas turbines, and diesel-electric locomotives. The company’s segments include construction, resource, energy and transportation, financial products, and others. Also, it has received four mentions in the popular Reddit forum r/wallstreetbets over the past 24 hours.

On December 14, CAT subsidiaries Progress Rail and BNSF Railway Company, and Chevron U.S.A. Inc., a Chevron Corporation (CVX) subsidiary, signed a memorandum of understanding (MOU) to advance the demonstration of a locomotive powered by hydrogen fuel cells. This solution could witness increased demand because using hydrogen fuel can reduce carbon emissions and help boost long-term growth for CAT.

CAT’s revenue for the fiscal third quarter, ended September 30, 2021, increased 6% year-over-year to $634 million. The company’s profit came in at $101 million, up 110% year-over-year. Its retail new business volume increased 29% year-over-year to $3.34 billion.

Analysts expect CAT’s EPS and revenue for its fiscal 2021 to increase 58.5% and 20.3%, respectively, year-over-year to $10.4 and $50.23 billion. It has surpassed the Street’s EPS estimates in each of the trailing four quarters. Over the past year, the stock has gained 14.4% in price to close yesterday’s trading session at $202.15.

CAT’s strong fundamentals are reflected in its POWR Ratings. It has an overall B rating, which equates to a Buy in our proprietary rating system. The POWR Ratings are calculated by considering 118 distinct factors, with each factor weighted to an optimal degree.

It has a B grade for Growth and Value. It is ranked #24 of 78 stocks in the B-rated Industrial – Machinery industry. Click here to see the other ratings of CAT for Momentum, Stability, Sentiment, and Quality.

Click here to check out our Industrial Sector Report 

Micron Technology, Inc. (MU)

MU provides memory and storage technology solutions, including dynamic random-access memory, negative-AND, three-dimensional XPoint memory, and NOR. Its brands include Micron and Crucial. In addition, the Boise, Idaho company has received 27 mentions in the WSBs over the past 24 hours.

On December 20, 2021, MU provided an upbeat quarter update fueled by the demand from networking, data center, and automotive customers. The company’s CEO, Sanjay Mehrotra, said, “Memory and storage will continue to grow faster than the rest of the chip industry, propelled by these new markets. These things are not just about calendar 2022, they’re even beyond that.”

For its fiscal first quarter, ended December 2, 2021, MU’s revenue came in at $7.69 billion, up 33.2% year-over-year. The company’s non-GAAP net income increased 175.4% year-over-year to $2.47 billion. Its non-GAAP EPS increased 177% year-over-year to $2.16.

For the quarter ending February 28, 2022, MU’s EPS is expected to increase 100% year-over-year to $1.96. Its revenue for its fiscal year 2023 is expected to increase 19.4% year-over-year to $38.40 billion. It surpassed consensus EPS estimates in each of the trailing four quarters. The stock has gained 26.8% in price over the past year to close yesterday’s trading session at $90.34.

MU’s POWR Ratings reflect this promising outlook. The stock has an overall A rating, which equates to Strong Buy in our proprietary rating system.

It has an A grade for Momentum and a B grade for Growth, Value, Sentiment, and Quality. Within the A-rated Semiconductor & Wireless Chip industry, it is ranked #9 out of 98 stocks. To see the ranking of MU for Stability, click here.

Click here to checkout our Semiconductor Industry Report 

Gartner, Inc. (IT)

IT is a research and advisory company that provides an advisory and objective resource for more than 14,000 organizations. The Stamford, Conn.-based company creates and distributes its research content through published reports, interactive tools, facilitated peer networking, briefings, consulting, and advisory services. It has received 27 mentions in the WSBs over the past 24 hours.

It is revenue for its fiscal third quarter, ended September 30, 2021, increased 16.1% year-over-year to $1.15 billion. The company’s adjusted EBITDA increased 81.5% year-over-year to $305 million. And its non-GAAP EPS came in at $2.03, up 123% year-over-year.

Analysts expect IT’s EPS and revenue for fiscal 2021 to increase 77.5% and 14.3%, respectively, year-over-year to $8.68 and $4.69 billion. It has surpassed the Street’s EPS estimates in each of the trailing four quarters. And over the past year, the stock has gained 107.5% in price to close yesterday’s trading session at $324.66.

IT’s strong fundamentals are reflected in its POWR Ratings. It has an overall rating of A, which equates to a Strong Buy in our proprietary rating system.

It has an A grade for Quality and a B grade for Growth and Sentiment. It is ranked #2 of 11 stocks in the A-rated Outsourcing – Tech Services industry. Click here to see the additional ratings of IT for Value, Momentum, and Stability.

CAT shares were trading at $206.61 per share on Thursday morning, up $4.46 (+2.21%). Year-to-date, CAT has gained 15.88%, versus a 27.60% rise in the benchmark S&P 500 index during the same period.

About the Author: Dipanjan Banchur

Since he was in grade school, Dipanjan was interested in the stock market. This led to him obtaining a master’s degree in Finance and Accounting. Currently, as an investment analyst and financial journalist, Dipanjan has a strong interest in reading and analyzing emerging trends in financial markets. More...

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