I believe buy American International Group (AIG) is the trade of the year. Downside risk is limited while upside potential is huge!
On 28 Dec 2012 I had bought AIG at $34.80. (Today AIG is trading at $38.86.)
Value investors said we should invest in stocks that are trading low price to book. Growth investors said we should invest in stocks with high growth rate. I had found a stock that have all of that.
This company suffered a crisis few years ago and hence the share price is heavily beaten down. It has since recovered from crisis and it is doing well now. Earning is growing. Yet price to book is only 0.52 times. That means that in the worst case senario, the company goes into liquidation, shareholders will still profit from sales of assets. Price earning ratio is only 2.70 times.
Many investors regard directors’ share dealings as a key indicator of future prospects. We have seen 5 different directors buying back the shares (see details below). This is a sign that they are positive about the future prospect of the company.
Fairholme Capital Management is a fund manager from US had been buying AIG shares aggressively.
Sanford C Bernstein & Co issues a buy recommendation on AIG, see here. The report mentioned that “We see a once in a generation low-risk chance to buy a recovering franchise at a substantial discount“.
AIG is trading in an uptrend
AIG has strong buying by its directors
To sign up for our Learn To Find Undervalued Stocks program, click at the link: http://findundervaluedstocks.com/learn-value-stock-investing
BL, CEO of Tactical Trading Academy – For Your Profits, Your Success Is Our Success!
“EVEN THE INTELLIGENT INVESTOR IS LIKELY TO NEED CONSIDERABLE WILLPOWER TO KEEP FROM FOLLOWING THE CROWD.” – BENJAMIN GRAHAM