Recent uptick might appease Ambac Financial Group, Inc. (NYSE:AMBC) institutional owners after losing 12% over the past year

Key Insights

• Significantly high institutional ownership implies Ambac Financial Group's stock price is sensitive to their trading actions
• A total of 12 investors have a majority stake in the company with 51% ownership
• Insiders have been buying lately

A look at the shareholders of Ambac Financial Group, Inc. (NYSE:AMBC) can tell us which group is most powerful. With 81% stake, institutions possess the maximum shares in the company. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

Last week's US$75m market cap gain would probably be appreciated by institutional investors, especially after a year of 12% losses.

In the chart below, we zoom in on the different ownership groups of Ambac Financial Group.

See our latest analysis for Ambac Financial Group

What Does The Institutional Ownership Tell Us About Ambac Financial Group?

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 Ambac Financial Group. 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 Ambac Financial Group, (below). Of course, keep in mind that there are other factors to consider, too.

Institutional investors own over 50% of the company, so together than can probably strongly influence board decisions. Ambac Financial Group is not owned by hedge funds. BlackRock, Inc. is currently the company's largest shareholder with 16% of shares outstanding. The Vanguard Group, Inc. is the second largest shareholder owning 8.7% of common stock, and Dimensional Fund Advisors LP holds about 5.9% of the company stock. In addition, we found that Claude LeBlanc, the CEO has 1.1% of the shares allocated to their name.

After doing some more digging, we found that the top 12 have the combined ownership of 51% in the company, suggesting that no single shareholder has significant control over 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 some analyst coverage of the stock, but it could still become more well known, with time.

Insider Ownership Of Ambac Financial Group

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.

Shareholders would probably be interested to learn that insiders own shares in Ambac Financial Group, Inc.. In their own names, insiders own US$17m worth of stock in the US$612m company. This shows at least some alignment. You can click here to see if those insiders have been buying or selling.

General Public Ownership

With a 17% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Ambac Financial Group. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Ambac Financial Group better, we need to consider many other factors. Be aware that Ambac Financial Group is showing 2 warning signs in our investment analysis , and 1 of those is a bit unpleasant...

Ultimately the future is most important. You can access this free report on analyst forecasts for the company.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.