Kiltacular Posted February 14, 2014 Share Posted February 14, 2014 Actually, AIG is currently 41% below book value, this is rediculous!!! (68.62/48.65) Once the ILFC deal closes, we should see another bump to the dividend / share repurchase program. AIG is overly capitalized... Tks, S You're right...I wrote that incorrectly. If AIG's price increases 25%, it will be at 60...at that price, it is about 90% of book. I could see someone making an argument it might not deserve to trade higher than that right now given where some other insurers are trading. It still seems way to cheap right now and I don't see what headline issue disappointed the market. It is fine with me too. Link to comment Share on other sites More sharing options...
alertmeipp Posted February 14, 2014 Share Posted February 14, 2014 yeah, about 30 percent below book. the buyback will likely increase book value per share. Link to comment Share on other sites More sharing options...
nkp007 Posted February 14, 2014 Share Posted February 14, 2014 Seems like a big lumbering insurance company that generates a lot of cash and will grow very slowly in the long-term. The most attractive part to me is the discount it is trading at as well as the potential catalysts over the next six months that should accrue to shareholders. Benmosche is very shareholder oriented. We have owned a concentrated position for a few years and this report seemed decent to me. Intrinsic value continues its slow, slow ascent. Link to comment Share on other sites More sharing options...
Kiltacular Posted February 14, 2014 Share Posted February 14, 2014 Seems like a big lumbering insurance company that generates a lot of cash and will grow very slowly in the long-term. The most attractive part to me is the discount it is trading at as well as the potential catalysts over the next six months that should accrue to shareholders. Benmosche is very shareholder oriented. We have owned a concentrated position for a few years and this report seemed decent to me. Intrinsic value continues its slow, slow ascent. I agree with the above and own it for the same reason. I own the warrants and common and have for a while. But, with the leasing deal (apparently) out of the way and with things generally looking slightly better...with Benmosche / board increasing the dividend and the buyback, I would have thought the market would have liked this report. A situation could emerge -- given your basic point -- where this sucker takes years to drift up to 90% of book. The original huge rally in AIG happened when they were making huge buybacks. That appears to have ended. It looks like there is a consensus here that there were no negative surprises. I'll hold. Link to comment Share on other sites More sharing options...
cubsfan Posted February 14, 2014 Share Posted February 14, 2014 Seems like a big lumbering insurance company that generates a lot of cash and will grow very slowly in the long-term. The most attractive part to me is the discount it is trading at as well as the potential catalysts over the next six months that should accrue to shareholders. Benmosche is very shareholder oriented. We have owned a concentrated position for a few years and this report seemed decent to me. Intrinsic value continues its slow, slow ascent. Yes, I liked the headlines and report until I saw the combined ratios. Benmoche has got some work to do. But buybacks are encouraging - and his opportunity to reduce the count at below BV. Link to comment Share on other sites More sharing options...
rpadebet Posted February 14, 2014 Share Posted February 14, 2014 Actually, AIG is currently 41% below book value, this is rediculous!!! (68.62/48.65) Once the ILFC deal closes, we should see another bump to the dividend / share repurchase program. AIG is overly capitalized... Tks, S Exactly... I continue to add to my options position. It's a shame they only added $1B to their share repurchase program especially with this large of a discount. Tks, S Anything jump out at anyone to justify negative response by the market (aside from P&C underwriting and buyback)? Does this thing still deserve to be 20-25% below book? I get 29% below BV. BV = 68.50 - current 48.65 = roughly $20 $20/68.50 = 29% below book Why should this be trading at book value without at least a 10% RoE? I believe their current RoE is around 7% or so. How do they get from there to 10%? They have a very big insurance business which has average/below average profitability. Combined ratios/expense ratios are still high. Investment book is mostly fixed income and exposed to rising rates. Asset sales and easy catalysts are mostly done. At this point what is misunderstood/misvalued? I continue to own this thing, but via the warrants and in my 401K through FAIRX. It is a slow growth average business in my opinion, so need the extra leverage of the warrants to meet my return thresholds. Link to comment Share on other sites More sharing options...
Uccmal Posted February 14, 2014 Share Posted February 14, 2014 Seems like a big lumbering insurance company that generates a lot of cash and will grow very slowly in the long-term. The most attractive part to me is the discount it is trading at as well as the potential catalysts over the next six months that should accrue to shareholders. Benmosche is very shareholder oriented. We have owned a concentrated position for a few years and this report seemed decent to me. Intrinsic value continues its slow, slow ascent. Thats roughly my take. Benmoche is being very cautious. He is already insanely rich. The only risk to him is reputational, and that seems very important to him. The sell off, such as it is (0 .02 % of the float) is not rational. Link to comment Share on other sites More sharing options...
BargainValueHunter Posted February 14, 2014 Share Posted February 14, 2014 AIG is now a slothy profit generator like L, MKL, FLO or Y. Link to comment Share on other sites More sharing options...
fareastwarriors Posted February 16, 2014 Share Posted February 16, 2014 AIG’S BOB BENMOSCHE MEMO TO EMPLOYEES http://www.bloomberg.com/article/2014-02-13/aWbEUgKiZLNM.html Link to comment Share on other sites More sharing options...
finetrader Posted February 21, 2014 Share Posted February 21, 2014 10K http://www.aig.com/Chartis/internet/US/en/Final-December-31-2013-10-K_tcm3171-579618.pdf What's not to like.. 6.00$EPS, share count decreasing year after year all this for 49$/sh Link to comment Share on other sites More sharing options...
pantheman Posted February 21, 2014 Share Posted February 21, 2014 10K http://www.aig.com/Chartis/internet/US/en/Final-December-31-2013-10-K_tcm3171-579618.pdf What's not to like.. 6.00$EPS, share count decreasing year after year all this 49$/sh Think this was previously discussed but couldn't find it in the last 10 pages or so (skimming briefly). The 10-K spells out more of a definitive date for Benmosche's stepping down than I've seen before. Last year's 10-K only mentioned him wishing to continue on beyond 2013. From the Risks section(pg. 45): "Mr. Benmosche may be unable to continue to provide services to AIG due to his health. Robert Benmosche, our President and Chief Executive Officer, was diagnosed with cancer and has been undergoing treatment for his disease. He continues to fulfill all of his responsibilities and has stated his desire to continue in such roles until the first quarter of 2015. However, his condition may change and prevent him from continuing to perform these roles." Link to comment Share on other sites More sharing options...
randomep Posted February 21, 2014 Share Posted February 21, 2014 10K http://www.aig.com/Chartis/internet/US/en/Final-December-31-2013-10-K_tcm3171-579618.pdf What's not to like.. 6.00$EPS, share count decreasing year after year all this 49$/sh Think this was previously discussed but couldn't find it in the last 10 pages or so (skimming briefly). The 10-K spells out more of a definitive date for Benmosche's stepping down than I've seen before. Last year's 10-K only mentioned him wishing to continue on beyond 2013. From the Risks section(pg. 45): "Mr. Benmosche may be unable to continue to provide services to AIG due to his health. Robert Benmosche, our President and Chief Executive Officer, was diagnosed with cancer and has been undergoing treatment for his disease. He continues to fulfill all of his responsibilities and has stated his desire to continue in such roles until the first quarter of 2015. However, his condition may change and prevent him from continuing to perform these roles." thanks I didn't know that Link to comment Share on other sites More sharing options...
racemize Posted February 21, 2014 Share Posted February 21, 2014 See attached the AIG reserve analysis. I've got the ones from 2011 and 2012 as well (I think posted somewhere in the thread).2013_AIG_Reserve_Triangle_Analysis.xlsx Link to comment Share on other sites More sharing options...
ourkid8 Posted February 27, 2014 Share Posted February 27, 2014 The upgrades have started! http://www.bloomberg.com/news/2014-02-27/aig-upgraded-by-fitch-after-debt-buybacks-improved-earnings.html?cmpid=yhoo American International Group Inc. (AIG), the insurer that repaid a U.S. bailout in late 2012, was upgraded by Fitch Ratings after buying back bonds and improving results at its units. The rating on senior debt was lifted to BBB+ from BBB as “earnings growth at the insurance subsidiaries and the repayment of higher coupon debt has led to significantly improved interest coverage,” Fitch said today in a statement on the New York-based insurer. Link to comment Share on other sites More sharing options...
vinod1 Posted February 28, 2014 Share Posted February 28, 2014 I put together a bunch of peers with which to compare current multiples. Peers already earning 10-12% ROE in P&C are getting a multiple of 1.2x book value. P&C unit really needs to improve its underwriting for AIG to be revalued upwards from here. Peter Hancock made the following comment in one of conf calls in response to a question on improving CR: "The actuaries take time to recognize initiatives that are emerging in the loss triangles, but may not be confirmed with enough statistical significance yet, so we have sort of some line of sight into the sort of future momentum. " So we should be getting the benefit out of all the initiatives in the next 1-2 years when they would have enough data. Thanks Vinod Link to comment Share on other sites More sharing options...
vinod1 Posted February 28, 2014 Share Posted February 28, 2014 See attached the AIG reserve analysis. I've got the ones from 2011 and 2012 as well (I think posted somewhere in the thread). Thanks race! You saved me a bunch of time. Vinod Link to comment Share on other sites More sharing options...
ourkid8 Posted February 28, 2014 Share Posted February 28, 2014 Great job putting this together. Don't forget there are also some staff reduction in 2014 which will help bring down costs. Tks, S I put together a bunch of peers with which to compare current multiples. Peers already earning 10-12% ROE in P&C are getting a multiple of 1.2x book value. P&C unit really needs to improve its underwriting for AIG to be revalued upwards from here. Peter Hancock made the following comment in one of conf calls in response to a question on improving CR: "The actuaries take time to recognize initiatives that are emerging in the loss triangles, but may not be confirmed with enough statistical significance yet, so we have sort of some line of sight into the sort of future momentum. " So we should be getting the benefit out of all the initiatives in the next 1-2 years when they would have enough data. Thanks Vinod Link to comment Share on other sites More sharing options...
cubsfan Posted February 28, 2014 Share Posted February 28, 2014 I put together a bunch of peers with which to compare current multiples. Peers already earning 10-12% ROE in P&C are getting a multiple of 1.2x book value. P&C unit really needs to improve its underwriting for AIG to be revalued upwards from here. Peter Hancock made the following comment in one of conf calls in response to a question on improving CR: "The actuaries take time to recognize initiatives that are emerging in the loss triangles, but may not be confirmed with enough statistical significance yet, so we have sort of some line of sight into the sort of future momentum. " So we should be getting the benefit out of all the initiatives in the next 1-2 years when they would have enough data. Thanks Vinod Nice work here - thanks ! Link to comment Share on other sites More sharing options...
fareastwarriors Posted March 12, 2014 Share Posted March 12, 2014 Downgraded to Hold at Deutsche Bank DeutscheBank_AmericanInternationalGrpDowngradingSharestoHold_Mar_12_2014.pdf Link to comment Share on other sites More sharing options...
fareastwarriors Posted March 13, 2014 Share Posted March 13, 2014 AIG Awards Benmosche $6 Million Bonus, Exceeding Target http://www.bloomberg.com/news/2014-03-13/aig-awards-benmosche-6-million-bonus-exceeding-target.html Link to comment Share on other sites More sharing options...
dutchman Posted April 4, 2014 Share Posted April 4, 2014 Anyone have a copy of the new Bernstein note? :) Link to comment Share on other sites More sharing options...
fareastwarriors Posted April 4, 2014 Share Posted April 4, 2014 Anyone have a copy of the new Bernstein note? :) Please see attached. AIG_-_Bernstein_Research_4-3-14.pdf Link to comment Share on other sites More sharing options...
Liberty Posted April 4, 2014 Share Posted April 4, 2014 Thanks fareastwarriors. update: ±90% combined ratio? Seems quite aggressive... http://i.imgur.com/FZlrMc3.png Link to comment Share on other sites More sharing options...
krazeenyc Posted April 5, 2014 Share Posted April 5, 2014 Thanks fareastwarriors. update: ±90% combined ratio? Seems quite aggressive... http://i.imgur.com/FZlrMc3.png well they do say... eventually. not much is too aggressive when the time frame is "eventually". Link to comment Share on other sites More sharing options...
Liberty Posted April 5, 2014 Share Posted April 5, 2014 well they do say... eventually. not much is too aggressive when the time frame is "eventually". True, but they're at 93 next year, so at that rate eventually probably means 2017... Link to comment Share on other sites More sharing options...
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