Sometimes the best signal that a stock is cheap comes from the person running the company. That's what happened with AMC Entertainment Holdings (AMC) on Tuesday, when CEO Adam Aron disclosed he'd bought a chunk of shares.
Aron picked up 250,000 shares in multiple transactions at an average price of roughly $1.38 per share, according to a Form 4 filing after the market close. He now holds about 2.44 million shares of AMC stock.
Insider purchases like this often mean the buyer thinks the stock is undervalued. And AMC shares have certainly taken a beating—down about 53% over the past year and more than 20% in just the last month.
Investors seemed to agree with Aron's bet. AMC shares closed Tuesday up 0.74%, then jumped another 6.18% in after-hours trading to $1.46 at the time of publication.
Whether this is a bottom or just a bounce remains to be seen, but when the CEO puts his own money on the line, it's worth paying attention.
