{"id":547225,"date":"2010-04-29T08:48:00","date_gmt":"2010-04-29T12:48:00","guid":{"rendered":"e2249889-c78b-43e3-9643-b1d7d4aa587b:430814"},"modified":"2010-04-29T08:48:00","modified_gmt":"2010-04-29T12:48:00","slug":"aig-may-be-overvalued-but-catalysts-could-provide-upside","status":"publish","type":"post","link":"https:\/\/mereja.media\/index\/547225","title":{"rendered":"AIG may be overvalued but catalysts could provide upside"},"content":{"rendered":"

American International Group Inc. (AIG) may be overvalued at US$40 per share based an updated sum-of-the-parts analysis that reflected recent developments by Andrew Kligerman at UBS. The analyst arrived at a fair value of US$31 based on changes in insurance sector multiples, pending sales of AIGs Asian unit (AIA) and its Alico foreign life insurance business, as well as other revisions.<\/p>\n

However, Mr. Kligerman feels there are several potential catalysts that could provide upside to his valuation, including a restructuring of the government\u2019s equity stake at favourable terms for AIG common shareholders. While the analyst does not think this is a highly probable outcome, multiple expansion in the life insurance or property and casualty space would boost the value of AIG\u2019s insurance operations and the equity-linked securities received from selling Alico and AIA.<\/p>\n

\u201cCurrent management has been disciplined in its asset sales, optimizing returns on asset disposals (not seen in the prior leadership),\u201d Mr. Kligerman said in a research note. \u201cAbating credit losses and successful debt offerings by subs suggest less reliance on the Fed Credit Facility.\u201d<\/p>\n

In addition to the sum-of-the-parts analysis that signals potential downside risk, the analyst also warned that AIG shares could see significant earnings per share and return on equity erosion if the non-cumulative series E\/F preferreds were replaced by common shares or cumulative public preferreds.<\/p>\n

\u201cAIG\u2019s earnings power will be materially weaker (post the sales of key foreign life subsidiaries) and there are some concerns around the adequacy of its P&C loss reserves,\u201d he added. <\/p>\n

Jonathan Ratner<\/a> <\/p>\n

<\/p>\n","protected":false},"excerpt":{"rendered":"

American International Group Inc. (AIG) may be overvalued at US$40 per share based an updated sum-of-the-parts analysis that reflected recent developments by Andrew Kligerman at UBS. The analyst arrived at a fair value of US$31 based on changes in insurance sector multiples, pending sales of AIGs Asian unit (AIA) and its Alico foreign life insurance […]<\/p>\n","protected":false},"author":4059,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[7],"tags":[],"class_list":["post-547225","post","type-post","status-publish","format-standard","hentry","category-news"],"_links":{"self":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts\/547225","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/users\/4059"}],"replies":[{"embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/comments?post=547225"}],"version-history":[{"count":0,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts\/547225\/revisions"}],"wp:attachment":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/media?parent=547225"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/categories?post=547225"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/tags?post=547225"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}