Yahoo Finance With 49% ownership, insiders at American Coastal Insurance Corporation (NASDAQ:ACIC) are pretty optimistic and have been buying recently
Key Insights
Significant insider control over American Coastal Insurance implies vested interests in company growth
52% of the business is held by the top 6 shareholders
To get a sense of who is truly in control of American Coastal Insurance Corporation (NASDAQ:ACIC), it is important to understand the ownership structure of the business. The group holding the most number of shares in the company, around 49% to be precise, is individual insiders. Put another way, the group faces the maximum upside potential (or downside risk).
Notably, insiders have bought shares recently. This might indicate that they expect share prices to rise in the near future.
Let's take a closer look to see what the different types of shareholders can tell us about American Coastal Insurance.
View 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 can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see American Coastal Insurance's historic earnings and revenue below, but keep in mind there's always more to the story.
American Coastal Insurance is not owned by hedge funds. Looking at our data, we can see that the largest shareholder is R. Peed with 37% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 4.7% and 3.0%, of the shares outstanding, respectively.
On further inspection, we found that more than half the company's shares are owned by the top 6 shareholders, suggesting that the interests of the larger shareholders are balanced out to an extent by the smaller ones.
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 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. The company management answer to the board and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board themselves.
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.
Our information suggests that insiders maintain a significant holding in American Coastal Insurance Corporation. Insiders own US$247m worth of shares in the US$503m company. We would say this shows alignment with shareholders, but it is worth noting that the company is still quite small; some insiders may have founded the business. You can click here to see if those insiders have been buying or selling.
General Public Ownership
With a 29% ownership, the general public, mostly comprising of individual investors, have some degree of sway over American Coastal Insurance. 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 American Coastal Insurance better, we need to consider many other factors. For example, we've discovered 2 warning signs for American Coastal Insurance (1 shouldn't be ignored!) that you should be aware of before investing here.
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.
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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.
