In this video, analyst Matt Koppenheffer outlines three reasons to buy AIG. First, the company is cheap. It currently sells for roughly 0.6 times tangible book value, far less than what it was selling for before the financial crisis. Second, it has made significant progress on turning itself around. It has paid off its government loans, sold off businesses, and restructured its balance sheet and itself to avoid past mistakes. Lastly, insurance is a cyclical market and the past few years have been soft for insurance companies. Right now, there are signs the insurance market is firming up and this should allow AIG to raise prices on its products and improve its profitability.
At the end of last year, AIG was the favorite stock among hedge fund managers. Have they identified the next big multibagger or are the risks facing the insurance giant still too great? In The Motley Fool's premium report on AIG, Financials Bureau Chief Matt Koppenheffer breaks down the key issues that you need to know about if you want to successfully invest in this stock. Simply click here now to claim your copy, and you'll also receive a full year of key updates and expert analysis as news continues to develop.