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NEW YORK (
) has been reiterated by TheStreet Ratings as a hold with a ratings score of C. The company's strengths can be seen in multiple areas, such as its solid stock price performance, good cash flow from operations and growth in earnings per share. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity and poor profit margins.
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Highlights from the ratings report include:
- Powered by its strong earnings growth of 34.23% and other important driving factors, this stock has surged by 41.80% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, our hold rating indicates that we do not recommend additional investment in this stock despite its gains in the past year.
- Net operating cash flow has significantly increased by 88.48% to $2,275.00 million when compared to the same quarter last year. In addition, AMERICAN INTERNATIONAL GROUP has also vastly surpassed the industry average cash flow growth rate of -23.45%.
- AMERICAN INTERNATIONAL GROUP has improved earnings per share by 34.2% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, AMERICAN INTERNATIONAL GROUP reported lower earnings of $4.27 versus $9.30 in the prior year. This year, the market expects an improvement in earnings ($4.34 versus $4.27).
- The gross profit margin for AMERICAN INTERNATIONAL GROUP is rather low; currently it is at 20.68%. It has decreased from the same quarter the previous year. Regardless of the weak results of the gross profit margin, the net profit margin of 14.36% is above that of the industry average.
- Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. When compared to other companies in the Insurance industry and the overall market, AMERICAN INTERNATIONAL GROUP's return on equity is below that of both the industry average and the S&P 500.
American International Group, Inc. provides insurance products and services for the commercial, institutional, and individual customers in the United States and internationally. The company operates in two segments: AIG Property Casualty, and AIG Life and Retirement. American International Group has a market cap of $75.1 billion and is part of the financial sector and insurance industry. Shares are up 44.6% year to date as of the close of trading on Monday.
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--Written by a member of TheStreet Ratings Staff.