American Coastal Insurance Corporation (NASDAQ:ACIC) insiders have recently purchased stock and their bets paid off last week as company hit US$577m market cap

Key Insights

• American Coastal Insurance's significant insider ownership suggests inherent interests in company's expansion
• The top 6 shareholders own 52% of the company
• Recent purchases by insiders

If you want to know who really controls American Coastal Insurance Corporation (NASDAQ:ACIC), then you'll have to look at the makeup of its share registry. We can see that individual insiders own the lion's share in the company with 49% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

Having purchased shares recently, insiders must be glad after market cap hit US$577m last week.

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

Check out our latest analysis for American Coastal Insurance

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

Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it's included in a major index. We would expect most companies to have some institutions on the register, especially if they are growing.

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. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of American Coastal Insurance, (below). Of course, keep in mind that there are other factors to consider, too.

American Coastal Insurance is not owned by hedge funds. The company's largest shareholder is R. Peed, with ownership of 37%. With 4.7% and 3.0% of the shares outstanding respectively, Gregory Branch and BlackRock, Inc. are the second and third largest shareholders.

We did some more digging and found that 6 of the top shareholders account for roughly 52% of the register, implying that along with larger shareholders, there are a few smaller shareholders, thereby balancing out each others interests somewhat.

While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiments to know which way the wind is blowing. There is some analyst coverage of the stock, but it could still become more well known, with time.

Insider Ownership Of American Coastal Insurance

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO.

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 insiders own a significant proportion of American Coastal Insurance Corporation. Insiders have a US$283m stake in this US$577m business. It is great to see insiders so invested in the business. It might be worth checking if those insiders have been buying recently.

General Public Ownership

With a 28% ownership, the general public, mostly comprising of individual investors, have some degree of sway over 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:

It's always worth thinking about the different groups who own shares in a company. But to understand American Coastal Insurance better, we need to consider many other factors. Consider for instance, the ever-present spectre of investment risk. We've identified 1 warning sign with American Coastal Insurance , and understanding them should be part of your investment process.

But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter future.

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.