American International Group (AIG)

Started buying this below $50 last year, but would still Buy at these prices. The BV grew double digits last year, yet the stock price didn’t. All you have to do with the insurance companies is follow the BV growth. Probably worth $65-$70 as share a year out.

A pretty simple property and casualty business with some wealth management on the side. Trading at a discount to Book Value at about 70% of Book and about 10X earnings. It is trading down here because its ROE is not as high as some of its competitors, but it is getting there. They are doing a lot of the right things. Earnings are being funnelled back to the shareholders. Making money on its underwriting in addition to its investment portfolio. Yield of 0.91%.

(Top Pick Oct 4/13, Up 11.05%) They went back to their roots after 2008. CEO is retiring. Trading at 75% of book value. 11 times earnings and good cash flow. A good solid core position.

(A Top Pick Aug 8/8/13. Up 14.07%.) He continues to like insurance. They continue to have opportunities and tailwinds that will continue to go on. This is still a Buy.

Not a huge fan of this at the current price. Has had a reasonable run. Not cheap and they are still dealing with some of the overhang of the issues they experienced during the financial crisis. There are better places to be.

Does not follow it, but they were the premier insurance company in the group prior to 2008. He would hold it. He does not think these interest rates will say around forever and AIG will benefit well as soon as the rates go up.

Started buying this a few months ago. Reported very good earnings last night and are buying back stock. Announced keeping their same strategy of slow and measured growth, but came out today and said that pricing was a little bit weaker than expected, so the stock did not react to the positive earnings. Trading at a deep discount to Book Value. Thinks they are creating shareholder value by Buying back stock at a discount. A lot more upside here.

Has done really well, but feels there is more room to go. At some point big institutions will come around and re-enter the stock. Trades at a big discount to Book. It could be liquidated today, and give every shareholder almost $70 a share. Should give you a decent return, not a huge one, but maybe 15%-20%. Yield of 0.91%.

(Market Call Minute.) Lots of upside potential, but he is not sure all of the US financial problems are behind them. The longer time goes on, the more and more chance this can roll higher.

They are affected a lot less by interest-rates, compared to lifecos which have very long-term liabilities that they have to fund. It invests in property and casualty, etc. so will not be affected as much.

Has all the hallmarks of a company that could do very well and is trading at a significant discount to BV. Probably trading at a 50% discount to what its peers are trading at. The reason for this is that a lot of their assets are still captive to what went on through 2008. The clock is ticking and they are recapturing some of these assets on which they are able to gain a much, much more higher return. That will take their ROE up. Also, expects BV to rise. Yield of 0.95%.

Thinks it will go higher. Over time, if you are patient, it is an interesting stock. All insurers will do well.

Great return of capital story. Property and casualty company. About $5 billion to buy back stock and increase dividend. 75% of income from premiums. Cheap multiple.

Now paying for past transgressions, but in the mean time it is trading at a deep discount to BV. Insurance is a necessity business and you can’t run a business, own a home or drive a car without insurance. They need to improve their combined ratio, so they are still losing money selling insurance overall, but you are getting paid for it with a long of margin of safety in the discount to BV. Clearly management feels good about this company as they are buying back stock and have just raised the dividend.

Thinks this has promise and has room to grow. You may have to be patient with this. This is a property/casualty company that has gone back to its roots. Have fairly good pricing power. Just initiated a new dividend after having paid off the government at a profit. Valuation basis is quite compelling.