American International Group- AIG
Here is my bold bullish play on AIG
American International Group, Inc., through its subsidiaries, provides insurance and financial services in the United States and internationally. It operates in four segments: General Insurance, Life Insurance and Retirement Services, Financial Services, and Asset Management. The General Insurance segment underwrites various business insurance products, including large commercial or industrial property insurance, excess liability, inland marine, environmental, workers compensation, and excess and umbrella coverages. This segment also offers various specialized forms of insurance, such as aviation, accident and health, equipment breakdown, directors and officers liability, difference-in-conditions, kidnap-ransom, export credit and political risk, and professional errors and omissions coverages. In addition, it provides property and casualty reinsurance products to insurers; automobile insurance products; residential mortgage guaranty insurance products; and second-lien and private student loan guaranty insurance products. The Life Insurance and Retirement Services segment offers individual and group life, payout annuities, endowment, and accident and health policies, as well as retirement savings products consisting of fixed and variable annuities. The Financial Services segment provides aircraft and equipment leasing, capital market transactions, consumer finance, and insurance premium financing. The Asset Management segment operations comprise investment-related services and investment products, including institutional and retail asset management, broker-dealer services, and spread-based investment products. The company was founded in 1967 and is based in New York, New York.
Today this stock has tanked on credit worries. In the last two days it has gone from $20 – $3. Bankrupcy is almost priced in.
Outlook This company is solvent (it can cover its debt obligations), it is simply ill-liquid. It has fantastic assets and it simply needs time – nothing else. If the Fed lets this company fail (and I am not pro-bailout for all of the others), panic will set-in.
They employ 116,000 people worldwide and it has over $1T in assets. With all that the Fed has done to avoid a financial crisis in the last year, a bridge loan seems like a slam dunk.
Tactic Buy AIG shares. They are trading for the price of an option. I believe the stock could rally to $10 or be worth $0. I see a 50:50 chance for either event and I am willing to risk $3 to make $7.
Buy and prosper! Happy Trading.