AIG has been holding strong at $50 per share, despite the fact that many biotech stocks, marijuana stocks, and high flyer tech stocks are down 25% in April? This is where those faithful AIG holders start to get rewarded for our discipline and long-sightedness. What we know:
-We trade at around 70% of tangible book value
-Rising interest rates will help AIG earnings, despite hurting most other stocks. For perspective lets assume AIG's $100 Billion float portfolio is invested in US treasuries at 3.75%....an increase of a mere 1% would add another $ 1 billion in AIG earnings annually. Obviously, this is a very simplistic example, but it provides perspective as to how powerful rising interest rates can be in bolstering earnings.
-Our holdings of AerCap have appreciated significantly, and the desired $5B that AIG was seeking from the sale of ILFC will likely be much higher when we finally exit the AerCap position in 2015. I'm guessing around $7-$8B total profit based on the AerCap share price by then.
There are many other reasons to be bullish here, but I just figured I'd share a few. Oh yeah, and it also helps that the stock trades at 8x earnings, while the S&P500 trades at around 17x earnings.
"We see a 200%-500% returns in 2-3 last years for loosing money companies or companies with huge P/E like FB , NFLX , TSLA , AMZN and many other ... and AIG is long way behind"......
History shows when the above type of stock rally, the market is extremely speculatively driven. Once those stocks crash (they are starting to), then value stocks like AIG rally.
be cheaper than the S&P 500 on a P/E basis. I am extremely long the Chinese stock market right now for this reason.
That we have been in a very speculative US stock market for a long time. Anytime when valuations go out the window and TWTR, FB, LNKD, TSLA like stocks are all trading at 100+ times earnings, stocks like AIG don't perform well being that they are value stocks. The market ignores the value stocks while they chase beta stocks until the beta stocks crater in the next bear market and the undervalued stocks reach full value. Please view Berkshire Hathaway stock performance during the 99 bull market, and then performance for 00-03 to see this phenomenon in action. I have no doubt the same thing is going on here.
if you google "Fannie and freddie discussion board" and click the google message board link, there is a group there that have recently started discussing these Lehman CTs...Lots of useful information.
LHHMQ, LEHNQ, LEHLQ
Folks, these are Lehman bothers cumulative preferred securities. They each have a $25 Face Value, and are owed 6 payments at 8%, which were suspended due to Lehman's bankruptcy.
These securities currently trade for around 50 cents a piece, but ultimately could be worth as much as $36 once everything is said and done. As I type this, Lehman's assets are being sold off and its debts are being repaid. Initially, most people thought there would be no money to cover these CTs, and that is why they sold off so hard. Well, they were wrong about that; assets are turning up all over the place (eg: Lehman owns 12% of NASCAR) and it looks like CT holders will be receiving a good deal of money. LEHNQ was uplisted on Friday; check if you don't believe me.
You can call me a pumper if you want, but I truly believe buying these CTs at these levels would be the equivalent of buying FNMA last year when it was trading at 17 cents. Good luck.
Both groups are equally as lost, but only one group knows it right now.
Hmmm.....if it so positive, how come a bill just came out yesterday looking to dissolve FNMA? How come $10 billion worth of shares were sold at the market in one trading session? That isnt spec money selling, that is hedge fund money dumping at any ask possible. You need to soberly look at things.
I'm not arguing if FNMA will survive or not. All I am saying is the the stock will test the lows and likely find new lows significantly below todays prices if history is any indication.
Listen man, I'm sorry you lost 40% of your money in the last two days, but don't take your anger issues out on me. I'm trying to save people money here by telling them to exit while they still have a chance.
The guy whose kids college education money is on the line will care if they don't listen to my warning.
Hit a low of $1.60 and rallied all the way to $2.74 that very same day...This was May 30th 2013. Twenty trading sessions later it hit $1.01 cents. In other words, history repeats itself and today rally is very typical, but weak considering how it rallied after the massive selloff last year. I have a feeling the next month for FNMA longs will be a very long one. Just my opinion.