Is it Still Safe to Invest in Ambac Financial (AMBC)?

Gator Capital Management, an investment management firm, published its fourth-quarter 2021 investor letter – a copy of which can be downloaded here. A return of 6.94% was recorded by the fund for the fourth quarter of 2021, compared to its benchmarks, the S&P  500 Total Return Index that delivered an 11.03% return, and the S&P 1500 Financials Index that had a 4.77% gain for the same period.  Spare some time to check the fund’s top 5 holdings to have a clue about their top bets for 2022.

Gator Capital Management, in its Q4 2021 investor letter, mentioned Ambac Financial Group, Inc. (NASDAQ: AMBC) and discussed its stance on the firm. Founded in 1971, Ambac Financial Group, Inc. is a New York, New York-based financial services holding company with a $576.4 million market capitalization, and is currently spearheaded by its CEO, Claude L. LeBlanc. AMBC delivered a -22.49% return since the beginning of the year, while its 12-month returns are down by -30.50)%. The stock closed at $12.44per share on March 11, 2022.

Here is what Gator Capital Management has to say about Ambac Financial Group, Inc. in its Q4 2021 investor letter:

“Although higher interest rates will benefit the Fund’s portfolio, we are making sure that the Fund is not simply a bet on higher rates. We have several large holdings with inexpensive valuations and catalysts unrelated to higher interest rates. Ambac (AMBC) has its lawsuit against Countrywide/Bank of America scheduled for September, 2022 which we expect will result in a large cash infusion to the company.

Research, Investment, Finance

Our calculations show that Ambac Financial Group, Inc. (NASDAQ: AMBC) failed to obtain a mark on our list of the 30 Most Popular Stocks Among Hedge Funds. AMBC was in 16 hedge fund portfolios at the end of the fourth quarter of 2021, compared to 15 funds in the previous quarter. Ambac Financial Group, Inc. (NASDAQ: AMBC) delivered a -18.80% return in the past 3 months.

In January 2021, we also shared another hedge fund’s views on AMBC in another article. You can find other letters from hedge funds and prominent investors on our hedge fund investor letters 2021 Q4 page.

Disclosure: None. This article is originally published at Insider Monkey.