December 7, 2023
Top 10 Stock AIG Buy Recommendation
How to read the ranks
For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".
Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".
Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.
Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.
(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).
(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.
Snapshot: AIG – Top 10 Stock in Dow Jones U.S. Insurance Index
AIG is listed as a top 10 stock on December 07, 2023 in the market index D.J. US Insurance because of its high performance in at least one of the Obermatt investment strategies. While only half of the consolidated Obermatt Ranks exhibit above-average performance, the professional market sentiment is positive and it may be a solid investment proposition, especially if a growth recovery is to be expected soon. Based on the Obermatt 360° View of 57 (high 57% performer), Obermatt assesses an overall buy recommendation for AIG on December 07, 2023.
Snapshot: Obermatt Ranks
| Country | USA |
| Industry | Multi-line Insurance |
| Index | Diversity USA, D.J. US Insurance, S&P 500 |
| Size class | XX-Large |
When Obermatt identifies the Top 10 stocks in a market, it’s based on a certain investment strategy. The best performing stocks usually aren’t the ones that everyone is talking about (those are often "over-priced" and have low Value ranks).
For each investment strategy, we provide you with more detailed analysis and our recommendation. You see the ranks of the top 10 stocks ranked by that particular investment strategy (360° View, Sentiment, Value, Growth, Safety and Combined Financial Performance).
360° View: Obermatt 360° View AIG Buy
| 360 METRICS | December 7, 2023 | |||||||
|---|---|---|---|---|---|---|---|---|
| VALUE | ||||||||
| VALUE | 58 |
|
||||||
| GROWTH | ||||||||
| GROWTH | 33 |
|
||||||
| SAFETY | ||||||||
| SAFETY | 23 |
|
||||||
| SENTIMENT | ||||||||
| SENTIMENT | 56 |
|
||||||
| 360° VIEW | ||||||||
| 360° VIEW | 57 |
|
||||||
ANALYSIS: With an Obermatt 360° View of 57 (better than 57% compared with alternatives), overall professional sentiment and financial characteristics for the stock AIG are above average. The 360° View is based on consolidating four consolidated indicators, with half the metrics below and half above average for AIG. The consolidated Value Rank has an attractive rank of 58, which means that the share price of AIG is on the lower side compared with the typical size in indicators such as revenues, profits, and invested capital. This means that the stock price is lower than for 58% of alternative stocks in the same industry. The consolidated Sentiment Rank has a good rank of 56, which means that professional investors are more optimistic about the stock than for 56% of alternative investment opportunities. But the consolidated Growth Rank has a low rank of 33, which means that the company exhibits below-average growth momentum when looking at financial metrics such as revenue, profit, invested capital growth, and stock returns. The consolidated Safety Rank has a riskier rank of 23, meaning the company has a riskier financing structure than 77 comparable companies when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. ...read more
RECOMMENDATION: With a consolidated 360° View of 57, AIG is better positioned than 57% of all alternative stock investment opportunities based on the Obermatt Method. Half of the consolidated Obermatt Ranks exhibit above-average performance, but the other half are below market levels. The company enjoys a good value (Value Rank of 58) and positive market sentiment in the professional investor community (Sentiment Rank of 56), but growth expectations are below-average (Growth Rank of 33) and the financing structure is on the risky side(Safety Rank of 23). This combination is rather dangerous, because high debt levels (low safety) require growth to finance the debt burden. The current low growth level may be temporary, because professionals are actually optimistic (positive sentiment). Good value is sometimes an indication that the company's future is challenging. The below-par growth performance may be the reason for this assessment. Companies with less growth typically have a lower price than fast-growing competitors. Even though professional investor sentiment is strong, we recommend further evaluating whether the future of AIG is as challenging as the stock's low price suggests. Since the professional community is optimistic, the stock might just be going through a more challenging phase now, indicating that timing might be good now. ...read more
Sentiment Strategy: Professional Market Sentiment for AIG positive
ANALYSIS: With an Obermatt Sentiment Rank of 56 (better than 56% compared with alternatives), overall professional sentiment and engagement for the stock AIG is above average. The Sentiment Rank is based on consolidating four sentiment indicators, with all but one indicator above average for AIG. Analyst Opinions are at a rank of 91 (better than 91% of alternative investments), which means that, currently, stock research analysts tend to recommend a stock investment in the company. In addition, Analyst Opinions Change has a rank of 56, which means that stock research experts are changing their opinions for the better in recommending investing in the company. In other words, they are getting even more optimistic about investments in AIG. Finally, the Professional Investors rank is 68, which means that currently, professional investors hold more stock in this company than in 68% of alternative investment opportunities. ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 56 (more positive than 56% compared with investment alternatives), AIG has a reputation among professional investors that is above-average compared with that of its competitors. Pros tend to favor investing in this company. But there is also a signal for caution. Market Pulse has a rank of 41, which means that the current professional news and professional social networks tend to be negative when discussing this company (more negative news than for 59% of competitors). This could mean future risks and should make investors careful. Attention to negative news for AIG is worthwhile because they may be early warning signals. Without those, all other professional signals are encouraging, especially since analysts are getting more optimistic. ...read more
Value Strategy: AIG Stock Price Value better than average
ANALYSIS: With an Obermatt Value Rank of 58 (better than 58% compared with alternatives), AIG shares are more attractively priced than the majority of comparable stocks. The Value Rank is based on consolidating four value indicators, with three out of four indicators above average for AIG. Price-to-Sales (P/S) is 59, which means that the stock price compared with what market professionals expect for future sales is lower than for 59% of comparable companies, indicating a good value regarding AIG's revenue size. The same is valid for expected Price to Profits (or Price / Earnings, P/E), more favorable than for 73% of alternatives, and it's also true for the Price-to-Book Capital ratio (also referred to as market-to-book ratio) with a Price-to-Capital Rank of 70. But, compared with other companies in the same industry, dividend yields are expected to be lower than average; only 44% of all competitors have even lower dividend yields than AIG (a Dividend Yield Rank of 44). 56% alternative investments in the same business provide a higher dividend yield. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 58, is a buy recommendation based on AIG's stock price compared with the company's operational size and dividend yields. The below-average dividend yield may be a good sign, as it could mean the company has more attractive investment opportunities for the generated cash than to pay it out as dividends. A low dividend yield can also indicate a growth phase. ...read more
Growth Strategy: AIG Growth Momentum low
ANALYSIS: With an Obermatt Growth Rank of 33 (better than 33% compared with alternatives), AIG shows a below-average growth dynamic in its industry. There is limited momentum in this company. The Growth Rank is based on consolidating four value indicators, with three out of four metrics below average for AIG. While Profit Growth has a good rank of 78, as professionals currently expect the company to grow its profits more than 78% of its competitors, all other growth indicators are below market averages. Sales Growth has a rank of 15, which means that currently professionals expect the company to grow less than 85% of its competitors, while Capital Growth has a rank of 18 and Stock Returns have been below market median, with a rank of 49 (51% of alternative investments were better). ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 33, is a hold recommendation for growth and momentum investors. While revenue growth and capital growth are good growth momentum indicators, profit is less reliable, because profits may increase due to cost-cutting measures which typically indicate negative growth momentum. "You can save a dollar only once" is the saying about such situations. Growth Investors should look at company priorities closely if they are interested in growth, because the increase in profits is not usually an indicator of growth, and stock prices have been below market, too. ...read more
Safety Strategy: AIG Debt Financing Safety risky
| SAFETY METRICS | December 7, 2023 | |||||||
|---|---|---|---|---|---|---|---|---|
| LEVERAGE | ||||||||
| LEVERAGE | 25 |
|
||||||
| REFINANCING | ||||||||
| REFINANCING | 10 |
|
||||||
| LIQUIDITY | ||||||||
| LIQUIDITY | 70 |
|
||||||
| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 23 |
|
||||||
ANALYSIS: With an Obermatt Safety Rank of 23 (better than 23% compared with alternatives), the company AIG has much riskier financing practices than comparable other companies, which means that their overall debt burden is significantly above the industry average. This doesn't mean that the business of AIG is also risky, it only means that the company is on the riskier side in respect to bankruptcy in case things turn sour, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with just one indicator above average for AIG. Liquidity is at 70, meaning the company generates more profit to service its debt than 70% of its competitors. This indicates that the company is safer when it comes to debt service. But Refinancing is riskier at a rank of 10, which means that the portion of the debt that is about to be refinanced is above average. It has more debt in the refinancing stage than 90% of its competitors. Leverage is also high at a rank of 25, which means that the company has an above-average debt-to-equity ratio. It has more debt than 75% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 23 (worse than 77% compared with alternatives), AIG has a financing structure that is significantly riskier than that of its competitors. High Leverage (a low Obermatt Leverage Rank) is good in good times, because it usually indicates that shareholders get higher returns. The good Liquidity performance of the company is an indicator that this is the case. However, if you expect an economic downturn, you may stay clear of this stock because they have an above-average debt level that needs refinancing soon. ...read more
Combined financial peformance: AIG Below-Average Financial Performance
| COMBINED PERFORMANCE | December 7, 2023 | |||||||
|---|---|---|---|---|---|---|---|---|
| VALUE | ||||||||
| VALUE | 58 |
|
||||||
| GROWTH | ||||||||
| GROWTH | 33 |
|
||||||
| SAFETY | ||||||||
| SAFETY | 70 |
|
||||||
| COMBINED | ||||||||
| COMBINED | 35 |
|
||||||
ANALYSIS: With an Obermatt Combined Rank of 35 (worse than 65% compared with investment alternatives), AIG (Multi-line Insurance, USA) shares have somewhat below-average financial characteristics compared with similar stocks. Shares of AIG are a good value (attractively priced) with a consolidated Value Rank of 58 (better than 58% of alternatives) but show below-average growth (Growth Rank of 33), and are riskily financed (Safety Rank of 23), which means above-average debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 35, is a hold recommendation based on AIG's financial characteristics. As the company AIG's key financial metrics exhibit good value (Obermatt Value Rank of 58) but low growth (Obermatt Growth Rank of 33) and risky financing practices (Obermatt Safety Rank of 23), it may be a risky investment, because debt in times of crises can make things worse. The good value, better than 58% of comparable companies, may indicate the company's future is challenging. If you believe that low growth is temporary or just due to a specific current event, you may conclude that the good value of the stock provides an attractive investment opportunity. ...read more
Obermatt Portfolio Performance
We’re so convinced about our research, that we buy our stock tips.
See the performance of the Obermatt portfolio.