Ambac shares could surge 50 pct: Barron's
NEW YORK Dec 22 (Reuters) - Shares of Ambac Financial Group Inc could be poised for steep gains in the coming years if the bond insurer continues to shrink its portfolio of obligations, business weekly Barron's wrote on Sunday.
The company, which emerged from bankruptcy in May, has set aside $6.6 billion to pay insurance claims against its obligations on a variety of distressed assets.
"Improving markets and Ambac's own initiatives give it a good shot at paying the insurance claims against it with much less," the financial publication wrote, citing an analyst who estimated the company could settle the outstanding claims for $5 billion.
Ambac has a market cap of about $928 million and the $1.6 billion difference between the estimate and the amount set aside "would be a lot of found money" for a firm of its size, Barron's wrote.
The publication estimated that Ambac shares could surge 50 percent within a year, "and substantially more in two or three years."
Shares of Ambac on Friday closed at $20.63 in trading on the Nasdaq.
- Mexican train derails, stranding 1,300 migrants headed toward U.S.
- Texas man charged with capital murder for shooting dead six |
- Palestinian death toll rises to 77 as Israel hits Gaza over rocket fire |
- Wall St. drops on Portugal bank worry; losses pared
- Berlin tells CIA station chief to leave in spy scandal