Cabot Undervalued Stocks Advisor

03/24/2017 2:50 am EST

Focus: STOCKS

Crista Huff

Editor, Cabot Undervalued Stocks Advisor

While news headlines might lead you to believe that American International Group (AIG) is in some sort of trouble, you should know that analysts expect $4.91 and $5.92 EPS in 2017 and 2018, with corresponding P/Es of 12.7 and 10.5. 

The company is thriving financially—with low debt levels and big returns of capital to shareholders—despite the media’s focus on whatever alarming thing they can highlight today.

Professional investors, who have the buying power to move the share price, are privy to AIG’s ongoing financial improvements. 

Don’t be distracted by news reporters who need to sell advertising space. It is true that CEO Peter Hancock stepped down due to pressure from activist investors including Carl Icahn. 

Keep in mind that Carl Icahn wouldn’t be involved with AIG if he didn’t see lots of unrealized value in the share price. Buy AIG now, while it’s low within its trading range. Yielding 2%, the stock is a Strong Buy.

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