Tom Reese/Paul Rubillo, Dividend.com
Ambac Financial Group (ABK) has lost some of its earlier gains, on news of a potential Moody’s downgrade.
Moody’s put the ratings of Ambac’s and MBIA’s (MBI) main bond insurance units on review for a possible downgrade. The ratings agency is preparing to cut again, because losses on securities backed by subprime mortgages may be much higher than it previously estimated.
The Bottom Line
The volatility of the Ambac’s (ABK) has been extreme this week. We pointed out that the shares were starting to make an early up move weeks ago, which put the stock on our radar screen. The action in the stock this week makes it a dangerous play for even the shorter-term focused investors. We would stand to the side until the stock proves it can break through recent highs of the $9-$10 area.
Ambac Financial Group (ABK) is not a recommended dividend stock at this time, holding a Dividend.com rating of 2.5 out of 5 stars.
Be sure to visit our complete recommended list of the Best Dividend Stocks as well as a detailed explanation of our ratings system here.
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