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AIG - American International Group


PlanMaestro

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I just added to my Warrant position on Friday.  This stock is still significantly below TBV, Approaching their ROE goal of minimum 10%, repurchasing shares ($1B program), initiated a dividend ($.40), target combined ratio of 90-95%... Am I missing something here? 

 

I understand right now that ILFC sale is up in the air but once this is either sold to the Chinese consortium or spun off in an IPO, our credit rating will improve and they will also announce a further increase to the share repurchase and or dividend. 

 

Tks,

S   

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I own AIG shares but let me be devils advocate.  They are still a ways off from 90-95 combined ratio and their 10% ROE.  Analyst earnings estimates for this year and next are in the low $4 range.  So you are paying an 11PE which is actually basically fairly priced.  There is also an unknown as to the impact of rising interest rates (or at least I can't figure it out).  Their are other insurers (genworth) trading at much greater discounts to tangible so it really comes down to the earnings.

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You are correct, estimates are in the low $4 for 2013 and 2014. Based on Q2 earnings and the direction and speed this transition is taking place, we need to be very careful if we should really look at analyst estimates as the company is starting to fire on all cylinders.  I was pleasantly surprised at the recent announcement of a capital return without the sale of ILFC.  I am currently purchasing warrants and are extremely long dated so I am not worried about short term fluctuations.  The key is having the strike price reduced and with the recent dividend is a wonderful start. 

 

I agree, rising interest rates are large unknown and that is my big concern I do have. 

 

Tks,

S

 

I own AIG shares but let me be devils advocate.  They are still a ways off from 90-95 combined ratio and their 10% ROE.  Analyst earnings estimates for this year and next are in the low $4 range.  So you are paying an 11PE which is actually basically fairly priced.  There is also an unknown as to the impact of rising interest rates (or at least I can't figure it out).  Their are other insurers (genworth) trading at much greater discounts to tangible so it really comes down to the earnings.

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At AIG, Benmosche Steers a Steady Course

 

CEO Stabilizes Insurer, Focuses on Core Mission.

 

http://online.wsj.com/article/SB10001424127887324807704579087360260812026.html?mod=WSJ_hps_LEFTTopStories

 

http://www.slate.com/blogs/moneybox/2013/09/24/aig_s_benmosche_bonus_outrage_just_as_bad_and_just_as_wrong_as_lynchin.html

 

The uproar over bonuses "was intended to stir public anger, to get everybody out there with their pitch forks and their hangman nooses, and all that-sort of like what we did in the Deep South [decades ago]. And I think it was just as bad and just as wrong."

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Wow, doesn't get more negative than this. They even name drop Munger in there.

 

Not one good word for Benmosche saving all those jobs and repaying the taxpayers with a profit, though...

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Guest wellmont

I don't think it was all him. I think he provided good leadership. but he needed help--from the employees, government, fed, financial markets, etc. I think there are a number of ceos who could have done the same thing. i think the us gov got paid back because the fed reflated and the asset values were there to be monetized. oh and mt is right about the bonuses. just ask henry paulson.

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Guest wellmont

I think what he is good at is creating shareholder value. I am a shareholder. it's amazing how many of these guys are in their own little world though.

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