Holly Energy Partners L.P. (HEP) and Two Companies Facing Activist Pressure Witness Insider Buying

Ambac Financial Group Inc. (NASDAQ:AMBC) saw two different insiders make sizable acquisitions of stock in March. To start with, Chief Executive Officer Nader Tavakoli bought 20,000 units of common stock on Wednesday and 8,390 units on Thursday at a weighted average cost of $15.98 per unit, boosting his direct ownership stake to 163,287 shares. Freshly-appointed Director, David L. Herzog, acquired a new stake of 12,820 shares on Thursday through multiple transactions at prices ranging from $15.69 to $15.89 per share.

The New York City-based bond insurer has been facing mounting pressure from activist hedge funds lately, which have been trying to push the company to speed up the payment of approximately $4 billion in insurance claims in which some of those funds have an interest. Canyon Capital Advisors LLC, co-founded by Joshua Friedman and Mitchell Julis, is one of Ambac’s equity holders that has been calling on the company’s CEO to step down. Canyon Capital owns 2.01 million shares of Ambac as of December 31, but is said to have ten times more debt interest in the company. The activist investment firm has been urging the bond insurer to accelerate the settlement of several billion dollars of policy claims, but the company said that “Canyon has as its singular objective the accelerated payment of Canyon’s creditor claims, not the best interests of Ambac’s shareholders”. Meanwhile, William C. Martin’s Raging Capital Management LLC, which owns 2.4% of the company’s shares, voiced its support for Ambac’s current position and urged Canyon Capital to “terminate their unnecessary proxy contest” (Canyon recently nominated three independent candidates for election to Ambac’s Board of Directors). Shares of Ambac Financial Group have advanced 12% since the beginning of 2016, but they are down 37% in the past 12 months. The smart money sentiment towards the bond insurer declined significantly during the December quarter, as the number of funds with stakes in the company dropped to 16 from 27 quarter-on-quarter.