American Coastal Insurance Corporation (NASDAQ:ACIC) insiders have had a fantastic week as stock increased 16%, and they haven't stopped buying

Key Insights

• Insiders appear to have a vested interest in American Coastal Insurance's growth, as seen by their sizeable ownership
• The top 4 shareholders own 51% of the company
• Insiders have bought recently

Every investor in American Coastal Insurance Corporation (NASDAQ:ACIC) should be aware of the most powerful shareholder groups. And the group that holds the biggest piece of the pie are individual insiders with 53% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

Insiders who purchased recently should be particularly happy after the stock gained 16% in the past week.

In the chart below, we zoom in on the different ownership groups of American Coastal Insurance.

See our latest analysis for American Coastal Insurance

What Does The Institutional Ownership Tell Us About American Coastal Insurance?

Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.

As you can see, institutional investors have a fair amount of stake in American Coastal Insurance. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It's therefore worth looking at American Coastal Insurance's earnings history below. Of course, the future is what really matters.

Hedge funds don't have many shares in American Coastal Insurance. The company's largest shareholder is R. Peed, with ownership of 39%. In comparison, the second and third largest shareholders hold about 5.1% and 3.1% of the stock.

On looking further, we found that 51% of the shares are owned by the top 4 shareholders. In other words, these shareholders have a meaningful say in the decisions of the company.

While studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock's expected performance. There is a little analyst coverage of the stock, but not much. So there is room for it to gain more coverage.

Insider Ownership Of American Coastal Insurance

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

Most consider insider ownership a positive because it can indicate the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.

It seems that insiders own more than half the American Coastal Insurance Corporation stock. This gives them a lot of power. So they have a US$266m stake in this US$505m business. Most would argue this is a positive, showing strong alignment with shareholders. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a 25% stake in American Coastal Insurance. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Be aware that American Coastal Insurance is showing 2 warning signs in our investment analysis , and 1 of those is concerning...

If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.

NB: Figures in this article are calculated using data from the last twelve months, which refer to the 12-month period ending on the last date of the month the financial statement is dated. This may not be consistent with full year annual report figures.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.