AIG Still Has Room to Run

 | Jan 10, 2012 | 3:35 PM EST  | Comments
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Stock quotes in this article:

aig

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trv

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cb

Did I start this AIG (AIG) boomlet when I said today that it was time to dust off the file for AIG? Because I have to tell you, I think this one has some running room, if only because the big hedge funds that owned it are doing so well in their other financials that people are going to say, "This is their year, let's get on board with these managers."

Plus, while there is a huge government overhang, the businesses are in the sweet spot of the insurance cycle.

AIG is sponsorless. It has two buys, of which only one seems current. Everyone else hates it. CEO Bob Benmosche is a proven operator who was initially dealt a declining hand but who has stabilized the business. The stock is down almost 50% year over year. But at the same time, its property and casualty business has to be doing well, because it's a darn good business, and a lot of the investment risk on the premium side -- what they do with the money -- seems to be factored in.

AIG is no Travelers (TRV) or Chubb (CRB), two best-of-breed outfits.

But it's down here in part because of the massive redemptions of the owners. All the other "redemption song" stocks are bouncing.

This one could bounce further, too.

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