Based on the aggregated intelligence of 165,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, insurance giant American International Group (NYSE: AIG) has received a distressing two-star ranking.
With that in mind, let's take a closer look at AIG's business and see what CAPS investors are saying about the stock right now.
AIG facts
|
Headquarters (Founded) |
New York City (1967) |
|
Market Cap |
$4.8 billion |
|
Industry |
Multiline insurance |
|
Trailing-12-Month Revenue |
$100.6 billion |
|
Management |
CEO Robert Benmosche (since 2009) CFO David Herzog (since 2008) |
|
Return on Capital (Average Past 3 Years) |
(4.1%) |
|
Compound Annual Revenue Growth (Over Past 3 Years) |
(5%) |
|
1-Year Return |
171% |
|
Competitors |
Prudential Financial (NYSE: PUK) MetLife (NYSE: MET) |
Sources: Capital IQ (a division of Standard & Poor's) and Motley Fool CAPS.
On CAPS, 24% of the 2,811 members who have rated AIG believe the stock will underperform the S&P 500 going forward. These bears include CAPS All-Stars Beorn10 and jed71.
Just three days ago, Beorn10 wrote that AIG "is like the old GM." Our CAPS All-Star continues: "I have lost faith in this company's ability to operate without government assistance, which means that it is no better than [Fannie Mae or Freddie Mac]. It also means that profits are no longer a priority. Its goal now is simply to survive until the next government hand out arrives."
Indeed, AIG has continued its business divesture efforts with varying degrees of success. The $15.5 billion sale of its American Life Insurance Co. to MetLife in March, for example, was a step in the right direction toward paying back the $182 billion in bailout funds it had received since September 2008. More recently, however, the deal to sell its Asian-unit, AIA Group, collapsed after AIG refused to accept Prudential's offer of $30.5 billion, after an agreement that was initially priced at $35.5 billion.
Last week, CAPS All-Star jed71 kindly updated Fools on AIG's latest payback plans:
The company is essentially in government receivership. The only value that could be placed on its shares would be based on what assets the government decides to let them keep. The decision to put the two Asian life insurance companies back on the selling block the other day further confirms this notion. It seems the government is continuing to force their hand to sell these units to pay back another chunk of the massive bailout they've received. If I remember correctly, the CEO took these units off the selling block last year and stated they had no intention to sell them. Seems his mind has been changed for him.
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