Category Archives: AIG

American International Group (AIG) – Analysis 2016-02-06

AIG increases value for its shareholders thru buy backs and dividends. The compounded annual growth rate was 6,15% last 3 years. AIG's goal is to grow its book value by 10% a year. ROE target long term is 10%.

What is this business worth?

Asset value:
Tangible book value per share is currently at 79,4 USD/share. If they can create value of 10% a year thru buy backs and dividends, book value should be met, leaving an upside of 49%. Further value can be created if the company is to be split up, with Icahn as the main driver.

Earnings power value:
Earnings have to come up to a 10% ROE to justify book value. Right now a 3% downside looking at the 5yEPV.

Disclosure: The author had no position when this post/analysis was written.

AIG 2016-02-06

AIG 2016-02-06

American International Group (AIG) – Analysis 2015-02-17

AIG keeps increasing its book value year over year. Annual compounded growth rate last 3 years was 13,24%. AIG's goal from now on until 2017 is to grow its book value by 10% yearly. Book value has increased by 13,22% last 12 months. Buybacks under book value is ongoing. ROE target long term is 10%. Last 12 months ROE was 6,69%.

What is this business worth?

Asset value: Tangible book value per share currently is at 77,69 USD/share.
Last years book value increase of 13,22% and AIG's goal of increasing 10% year on year until 2017 is realistic. Buybacks are contributing alot to this. With an annual requirement of 10% return AIG is worth at least book value. 44% upside currently.

Earnings power value: 10% required return a year equals an upside of 28% looking at last 5 years average earnings. Earnings have to come up from average last 3 years numbers though to justify book value if disregarding buybacks.

Disclosure: The author had a long position when this post/analysis was written.


AIG 2015-02-17