AIG Trading Down After Negative Barron's Piece
Up)
Lately, everyone's favorite stock to trade has been momo play, American International Group (NYSE: AIG), is finally having a down day after a negative Barron's piece. AIG is trading down approximately 6.73% to $46.88 after Barron's called AIG's shares extremely overvalued.
Barron's makes the point that AIG's market value is double that of Chubb (NYSE: CB), one of the best-managed property-casualty insurers.
AIG's shares spiked last week after its CEO, Robert Benmosche, made several comments to the media. For example, Benmosche told the press that he will consult with former AIG CEO Hank Greenberg, and he also said that he'll be patient in disposing or selling off AIG's various businesses.
Barron's calculations says that AIG has negative tangible common shareholder equity, in contrast with the positive figures for nearly all major life and property-casualty insurers. Additionally, investors should not take comfort in that AIG trades below its stated book value of $83 a share, the figure cited in AIG's Q2 earnings release.
The paper did say investors who want to own AIG should avoid the common shares and buy the company's debt instead, including its 8ΒΌ% bonds due in 2018 that trade around 80 cents on the dollar, for a yield of 11.84%.
Barron's makes the point that AIG's market value is double that of Chubb (NYSE: CB), one of the best-managed property-casualty insurers.
AIG's shares spiked last week after its CEO, Robert Benmosche, made several comments to the media. For example, Benmosche told the press that he will consult with former AIG CEO Hank Greenberg, and he also said that he'll be patient in disposing or selling off AIG's various businesses.
Barron's calculations says that AIG has negative tangible common shareholder equity, in contrast with the positive figures for nearly all major life and property-casualty insurers. Additionally, investors should not take comfort in that AIG trades below its stated book value of $83 a share, the figure cited in AIG's Q2 earnings release.
The paper did say investors who want to own AIG should avoid the common shares and buy the company's debt instead, including its 8ΒΌ% bonds due in 2018 that trade around 80 cents on the dollar, for a yield of 11.84%.
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Maurice R. "Hank" Greenberg, Barron'sSign up for StreetInsider Free!
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