This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

AIG Set To Move Higher From Here

Stocks in this article: AIG

Chris Lau, Kapitall: The turnaround at  American International Group (AIG) is taking shape. Not only did the firm report a strong quarter, but AIG is buying back shares and working to sell its International Lease Finance Corp division (ILIC). Both moves suggest there is more upside to the stock.

[Read more from Kapitall: Growth In Beauty: 3 Rallying Stocks With High ROE]

Good: Quarterly results

AIG earned $1.12 per share, beating estimates by a full $0.26. The board declared a dividend of $0.10 per share, which will yield only around 1% annually. AIG’s board also said it would buy back $1 billion of its shares, which should give AIG better support at current prices. Income rose nicely, particularly in Life & Retirement (up 23% from last year) and mortgage insurance (up 70%).

The book value of AIG is $61.25, which is an increase of 11%.

Catalyst: ILFC

A sale of the ILFC would be positive for shareholders as it removes a non-core business and improves the overall health of AIG’s balance sheet. Once the company’s ILFC is sold, AIG could focus on its core business of insurance. AIG is working with a Chinese consortium to sell its leasing unit. A July 31 deadline passed, but AIG is extending the deadline to August 31.

If the sale of the unit fails, it would not be a catastrophe for investors. AIG could issue an IPO to realize the full value of the leasing unit.

AIG moving towards $50

AIG is set to trade around $50, a price not seen since 2011:

Other reasons to be bullish

The prospects of higher interest rates will be positive for AIG, since it would help the insurance company’s bottom line. AIG trades far below its book value of $61.25, a sharp discount to its historical average.

1 of 2

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • 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 Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 18,030.21 +6.04 0.03%
S&P 500 2,081.88 -0.29 -0.01%
NASDAQ 4,773.4720 +8.0480 0.17%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs