2. American International Group
Shares of American International Group (AIG) closed at $35.05 Monday, trading for 10 times the consensus 2013 EPS estimate of $3.51. The consensus 2014 EPS estimate is $3.95.
Of course, the AIG story has been dominated by the aftermath of the massive bailout the company received in 2008 and 2009 -- a story that is now over, as the government in December completed its sale of common shares it held in the company. AIG's stock buybacks from the government during 2012 were a major factor in the 52% return for its stock.
But the company also has multiple insurance businesses to run. The company on Dec. 7 announced that its preliminary estimate of losses from Sandy was $2.0 billion, net of reinsurance, or $1.3 billion, after tax.
During the first three quarters of 2012, AIG reported an underwriting an underwriting loss of $838 million for its Property Casualty unit. During 2011, the underwriting loss for AIG's Chartis unit was $3.2 billion.The consensus fourth-quarter estimate is for AIG to report a loss of nine cents a share, compared to a profit of a dollar a share the previous quarter, and earnings of 82 cents a share in the fourth quarter of 2011. Wells Fargo analyst John Hall on Thursday downgraded AIG to a "Market Perform" rating from "Outperform," saying that "while we believe that AIG shares remain attractively priced, we are less optimistic about the emergence of near-term catalysts to push the shares higher in 2013." "Looking ahead, we see the opportunity associated with AIG shares linked to the company's capacity to improve its property-casualty results," Hall said. "These efforts include re-underwriting, re-pricing, re-tooling claims administration and reallocating capital to consumer lines. Over time, we expect AIG to be successful although we are not projecting a substantial P&C improvement over the next year." Hall estimates that AIG will 86 cents a share in 2013. AIG data by YCharts
Interested in more on American International Group? See TheStreet Ratings' report card for this stock.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV