What Insider Buying Activity at These Three Companies Tells You About Their Prospects?

Let’s now turn our focus on the insider buying activity at Citizens Financial Group Inc. (NYSE:CFG), which registered a heavy insider buy last week. Vice Chairman and Head of Commercial Banking Donald H. McCree acquired an 80,000-share stake on Thursday at a weighted average price of $25.83. At the end of October, RBC Capital Markets reiterated its ‘Sector Perform’ rating on CFG’s stock and raised its price target to $25 from $24. The company’s business operations are mainly affected by national and regional economic conditions, which have been quite favorable this year. The path of interest-rate increases, the health of the housing market, the growth of the U.S. economy, and the strength of the labor market are the most prominent factors that can impact its business, so one might expect more upside for CFG’s shares in the forthcoming months. Meanwhile, the stock is nearly 3% in the green year-to-date, trading at an attractive trailing price-to-earnings ratio of 17.13 (the ratio for the S&P 500 stands at 22.70). CFG lost its popularity within the hedge fund industry during the second quarter, as the number of top money managers invested in the stock declined to 38 from 76 quarter-on-quarter. Richard S. Pzena’s Pzena Investment Management holds a 2.50 million-share position in Citizens Financial Group Inc. (NYSE:CFG) as of September 30.

Lastly, Ambac Financial Group Inc. (NASDAQ:AMBC) had one of its top executives buy stock last Thursday. Nader Tavakoli, Interim President and Chief Executive Officer since January 2015, bought 31,325 shares at $15.04 apiece, boosting this overall holdings to 46,325 shares. The holding company whose subsidiaries offer financial guarantees and other financial services has seen its stock decline 38% thus far this year. On November 9, the company reported its third quarter financial results, posting a net loss of $391.0 million or $8.66 per diluted share, which compares with net income of $282.7 million or $6.05 per diluted share reported last year. However, the net loss was mainly attributed to a $514.5 million goodwill impairment charge. Meanwhile, the company’s operating earnings came to $282.7 million, up from $170.5 million registered in the same period last year. The number of hedge funds observed by our team with positions in Ambac remained unchanged during the second quarter at 29, amassing 32.80% of the company’s outstanding common stock on June 30. Andy Redleaf’s Whitebox Advisors cut its exposure to Ambac Financial Group Inc. (NASDAQ:AMBC) by 396,570 shares during the third quarter, remaining with 566,729 shares.

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