Gordon ReidAmerican International GroupAIGBUYAug 03, 2016

AIG-N vs. MET-N. AIG-N has been recapitalizing since the disaster of the financial crisis. MET-N did not suffer these issues. The life business is in pretty decent shape but he prefers Canadian lifecos.

(Past Top Pick, June 13, 2017, Down 12%) He sold his earnings last November to cut his losses. The reason was that AIG took massive writedowns after their new CEO took over. He didn't want to be in this turnaround plan.

The company is trading below book value. He does not see many companies who can combine P&C and Life business well. It has never really recovered from the financial crisis.

(A Top Pick Feb 6/17 Down 5%). He thinks insurance companies are having a tough go. They are not benefiting like other financial assets. He is disappointed with its performance.

Fine at current levels and would stick with it. It's building a base around $59-60. Looks solid here.

(A Top Pick Jan 5/17. Down 5%.) Very disappointing. Still struggling and is at EBV-3. As interest rates go up, this should do better.

(A Top Pick Jan 4/17, Down 6%) He thought the street might recognize its value. He got his money back but decided he could do better elsewhere.

Had owned this until about a year ago, and then moved aside. Had some difficulties with management. Even against their peer group in the insurance space, this company is not operating that efficiently.

Has a new CEO, a long-time industry veteran. The company is still having a tough time coming out of the financial crisis. Its focus in recent years has been cost cutting, working down debt, buying back stock, but it really hasn’t had much profitable growth. The new CEO is focused on profitable growth. This stock is so cheap, trading at .8X BV, where most of them are trading at 1.4X BV. There is no reason it can’t get it to that level. It is going to take time and could get ugly and messy, but he is willing to commit 3-5 years. If it happens, it will be a $100+ stock. Dividend yield of 2%. (Analysts’ price target is $70.50.)

(A Top Pick March 21/17. Up 3%.) Basically trades in line with the S&P 500. One of the top insurance names on the planet. Trading slightly below BV, while it normally is about 2X BV. There is an activist in there shaking things up. A conservative way to play financial services and to hedge your portfolio against higher interest rates.

If you felt the need to pick one insurance company, this is not the one he would go with. There is a lot happening with this, and you should let the dust settle a little.

He is looking for market-leading companies that are in sectors out of favour, and either have very strong dividends or some sort of catalyst that will unlock value. Mr. Icahn has taken a position and he knows value, will perhaps break it apart with the sum of the parts being worth more than the whole. (Analysts’ price target is $70.)

They had a messy quarter in terms of write downs. There may be more coming so he would wait a quarter or two to see them clean up their book a little bit.