it has taken a 5.4 percent stake in American Medical Security Group in an attempt to push management into taking steps to boost the company's stock value.

Caxton said AMS's common stock was significantly undervalued, and Caxton was concerned that steps taken by the company to increase the share value had been insufficient.

The investment firm, in a filing with the Securities and Exchange Commission, said it was considering proposing that the company pursue a merger, reorganization or liquidation, encouraging leading or participating in a proxy fight to change management, or make a tender offer to acquire the company.

Shares in the marketer of health care benefits and insurance products to small businesses, families and individuals, were up 5/16 to 5-7/8 on the New York Stock Exchange.

Its 52-week high is 16-1 . Caxton said it had already discussed its concerns with management as well as other shareholders and potential financial and strategic investors in the company.

During the meeting with AMS officials, Caxton "indicated their support for our strategy -- those in place as we speak -- designed to improve our financial performance,'' said Cliff Bowers, an AMS spokesman.

"Those strategies include price increases, exiting from unprofitable markets, the design of certain products lines and other actions,'' he said.

AMS shares the "belief that our share price is undervalued''.

Meanwhile, Caxton urged AMS to take "further immediate steps to enhance shareholder value in order to prevent a deterioration of the underlying value of the company'' by supporting under-performing business operations, the filing said.

Caxton added 711,000 shares to its portfolio during the last three months for prices ranging from $4 a share to $6.25 per share, according to the filing.

The investment house now holds beneficial ownership of 877,400 shares.