Bob, I own Sberbank in Russia and consider it to be a very cheap bank considering it earns 20% ROE and 2% ROA. Can you share with us any other cheap names that you like out of Russia?
Okay great.....go take a look at AAPL's chart from 2009-2012 and count how much money it would have cost you if you wait for the RSI to hit 30. Or any breakout stock for that matter.
What's the alternative thing to do with the float? Buy 30 year treasuries yielding 3.4%?
If they can make relatively conservative business development loans at 7% or so, then yeah, that's an additional $54 million a year pre-tax relative to just buying treasuries.
Personally, I'd like to see AIG start acquiring to some small specialty under underwriters, or trying to invest money in China (when there is blood on the streets, it is time to buy). Even Russian depository banks are offering 8% per annum in Rubles. I think there is opportunity, but I doubt AIG's management has the Chutzpah for this type of aggressiveness, not would the Fed allow it.
I'm happy that it is an insider getting promoted. Also am happy because prior to AIG Hancock spent 20 years at JPM Chase, and ran their derivatives business. In 2008 when the world was falling apart, JPM was able to navigate the storm in far better shape nearly all other financial firms, which speaks to of his experience within the derivatives business.
A big part of AIG's business is derivatives based, it is the nature of the business. It's a good thing that we have a new CEO whose entire career was focused on risk management. He likely will own a ton of stock, so his interests will be aligned with ours as well.
I feel good about this replacement.
I much rather the company use money for buybacks rather than dividends. As a matter of fact, I'd like to see AIG drop the dividend altogether and just focus on buybacks, but I understand they can't because they need to stock to appeal to dividend mutual funds and the like.
Just doing a back of the envelope here:
$2B Buyback / $80B Market Cap= 2.5% of all shares reduced.
$71.77 Book Value Per Share / 97.5% outstanding shares = $73.61
Am I missing anything here?
I saw AIG opened up 1.5% and started to selloff at around 11am....Same time that Hank Greenberg was giving an interview. Anyone know if he said something nasty about AIG today? Thinking that may have caused some of the later selling.
it usually moves very quickly up to fair value (at least $72 in the case of AIG). I would encourage people to look at charts of Wal-Mart and Chubb for examples of this phenomenon.
The Shanghai stock exchange is half off its 2007 highs, in an economy whose GDP will grow at minimum of 7% annually for the next decade. The entire market trades at a p/e of around 7-8.
Meanwhile the US Stock market trades at a p/e of 18, is way above its 2007 highs in an economy that will grow at maximum of 2% for the foreseeable future. It is time to bet big on Chinese stocks folks.
Today Gazprom ensured its survival for the next 40 years. 95% of publically traded corporations will be either acquired or bankrupt 40 years from now. Even after the China deal, Gazprom trades at 2.6x earnings, while Facebook trades at 76x earnings.
I truly believe that Gazprom offers a remarkable opportunity to longsighted investors. Russia is starting to become more shareholder friendly and I believe eventually Gazprom will fetch 10-12x multiple on earnings. That represents a 400% increase from today's prices.
The company has tripled revenues, and earnings since 2004. And they underwrite property/casualty profitably, something that AIG currently does not do. There could be some synergy there with an acquisition.
Check that one out. It is an insurance player as well; trades at 85% of book, and only a $800 million market cap. Their earnings, revenues, book value have all basically tripled since 2004. I think AIG would be very wise to think about acquiring this one; they are superb underwriters.