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American International Group, Inc. Message Board

  • kmcmahon38 kmcmahon38 Mar 25, 2013 1:56 PM Flag

    Fellow AIG Longs, Just Think....

    On May1st AIG will report earnings...There will be no Hurricane Sandy losses, no loss from sale of ILFC, a likely announcement of dividend plans/buyback, announcement of progress in entering China Life Insurance market again, etc. I expect AIG to once again blow analysts expectations out of the water.

    Yeah, the market has been going up and we have been stuck in a range....but much of this has to do with the fact that hedge funds became ultra long the stock, while mutual funds/pensions etc are avoiding it because many of their charters require dividends on the stocks they buy. Hedge funds are the most impatient capital in the world anyway. As soon as a hedge fund manager hears that a stock is the most widely held stock in thye hedge fund universe, his natural inclination is to bail on the stock? Why? Because hedge fund managers get paid by the amount of assets the gather, and the only way the can attract assets is by being different than other funds and trying to consistently outperform, month after month after month.

    I know some longs here are probably bored while they wait around, but do consider the following...

    AIG trades at .58x tangible book value. They will easily trade at 1.5x book at some point in the future. (During the Hank Greenberg days they traded at 5X book value). Book value will continue to grow at about an 8% basis for the next ten years. That puts us at $187 per share in 2023, not including buybacks and/or dividend payments collected in between. Anyone who knows anything about insurance knows that AIG basically insures 1 out of every 4 factories, smokestacks, lumberyards, etc in the world. The company is positioned in 130 different countries and has raised its P&C rates 14% year over year. Additionally, in Berkshire Hathaway's latest annual report, Warren Buffett reminded us that "the world will always need."

    Anyways, I know this was a long winded post, but I just wanted to remind people that the story at AIG is getting better daily, and I ....

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