Track the companies that matter to you. It's FREE! Click one of these fan favorites to get started: Apple; Google; Ford.



3 Reasons AIG Is Poised for Greatness

Watch stocks you care about

The single, easiest way to keep track of all the stocks that matter...

Your own personalized stock watchlist!

It's a 100% FREE Motley Fool service...

Click Here Now

It's been a long road for American International Group (NYSE: AIG  ) since the financial crisis, but the insurer seems to finally be back on its feet and ready to move forward. Though there are still challenges ahead, AIG is taking steps to position itself for greatness and is on its way to realizing some big goals. Here are the top three reasons AIG is poised for greatness, and how you can cash in on its progress.

Reason 1: Focus
The financial crisis not only took the wind out of AIG's once-billowing sails, but it added heavy burdens to the company as it made its way through the storm. With the final traces of governmental ownership shed in late last year, the weight has mostly been lifted, and AIG has refocused its energy on long-term goals.

Not only has the insurer dropped its ownership matters, it's also shed a number of non-core businesses that put a drag on its traditional operations. Though there is a new hiccup with the sale of its aircraft leasing operations, AIG has largely focused on renewed vigor in its insurance operations, expansion, and reductions in non-essential programs.

Focus has also been a cornerstone of management's approach to the company's balance sheet and shareholders. Though investors and analysts alike have been predicting and calling for a dividend or share buyback, management made it clear that neither of those would occur until other priorities were completed. One of the main priorities being liabilities management -- by reducing their liabilities, the company now carries a lighter interest expense, leaving more capital available for other priorities or disbursements.

Reason 2: Expansion
AIG made a big investment in China last last year, with a $500 million price tag. In its work with the PICC Group in China, AIG has already realized a 10% return as of the first quarter. With a renewed confidence in the opportunities the People's Republic provides, AIG is now partnering with PICC Life Insurance to form an agency distribution company, of which AIG will own 24.9%. Expanding outside of the property and casualty insurance lines their initial investment afforded, AIG is pressing forward into a new middle class that will be reaching out to providers for the first time in search of new insurance products that meet their needs. Though the current expansion news speaks mostly of activity in China, the moves made by AIG prove that the company is willing to put its money on the line in emerging markets that afford new opportunities -- and that it can succeed in doing so.

Reason 3: Renewal
With its recent title of hedge-fund darling, AIG has had a renaissance among Wall Street elite. And with renewed vigor for its stock from top money managers, the insurer only has to wait a bit longer for that feeling to spread beyond Wall Street and Broad. Once Main Street gets on board, the insurer's stock will soar.

Renewed confidence in the company itself will also propel investors to its shares, leaving behind the villainous reputation that it acquired during the financial crisis. With management open to discuss the company's successes and shortcomings, shareholders should feel that openness to disclosure lift some negative sentiments toward the company as it moves forward.

Before the financial crisis, AIG was a great power in the financial sector. But it may have taken the precipitous fall during the crisis for the insurer to realize what it takes to achieve true greatness. With its focus aligned with long-term success, aggressive strategies propelling it forward, and renewed confidence on Wall Street, AIG is poised to launch itself to greater heights. For investors, this is an opportunity to rise with the insurer from the ashes and cash in on greatness. 

AIG's stock has been a favorite among hedge fund managers. Have they identified the next big multi-bagger, 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.

Read/Post Comments (0) | Recommend This Article (1)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2463758, ~/Articles/ArticleHandler.aspx, 8/31/2016 10:42:36 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated 1 hour ago Sponsored by:
DOW 18,400.88 -53.42 -0.29%
S&P 500 2,170.95 -5.17 -0.24%
NASD 5,213.22 -9.77 -0.19%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

8/31/2016 4:00 PM
AIG $59.83 Up +0.19 +0.32%
American Internati… CAPS Rating: ****