Pro: AMC is a good investment, just 'not for the faint of heart'

Ben Emons of Medley Global Advisors was on CNBC to discuss the reasons for continuing to hold the shares of AMC Entertainment Holdings Inc. (NYSE: AMC), which he first bought in the fall of last year.

AMC shares are up 2.9% in morning trading and have been highly volatile over the past few weeks rising by more than 4.5 times in the past one month. AMC, a so-called meme stock, is a favourite among the followers of Reddit board WallStreetBets.

AMC is a reopening play

Emon thinks that AMC stands to benefit from the reopening as people would head to watch movies again. He said:

He further added that AMC is a bellwether of Mall America and once venues open, companies like AMC will be on the receiving end of a massive pent up demand.

He also added a note of caution by advising investors to trade AMC as long as the weight in the portfolio is set conservatively at 1% maximum.

Disconnect between analyst price target and what company is doing

15 analysts following the stock have an average price target of $5.11 on AMC while the stock opened at $58.10 today morning.

Emon thinks there is a disconnect between the analyst price targets and the company has been doing in recent months. He added:

This week AMC completed an equity raise of $587.4 million by selling 11.55 million shares at an average price of approximately $50.85 per share. This was on top of the $658.5 million already raised this quarter resulting in a total equity raise of $1.246 billion in the second quarter.

AMC CEO Adam Aron indicated that the company will be using the proceeds to deleverage its balance sheet.