This is a step-by-step stock review to answer the question, is American International Group (AIG) stock a good buy?
This article will teach you how to use the 4Ms of investing. This will be a detailed walkthrough to show you how the 4Ms work and why they are important. If you are interested, you can log into Tykr to use the 4M Confidence Booster (Powered by OpenAI) which will allow you to complete a 4M Analysis in less than 60 seconds.
What are the 4Ms?
- MOS (Margin of Safety) – The MOS is the math part of investing which includes the Summary, Score, and MOS (Margin of Safety).
- Meaning – The meaning is the business model and how scalable the revenue streams are.
- Moat – The moat is how the business compares to other companies in the same Sector and Industry.
- Management – The management is the track record of the CEO.
What 4M score are we going for?
- 80-100 = High confidence – Yay! You should have high confidence buying this stock. It passes all 4M!
- 60-79 = Moderate confidence – Alert! There may be better stocks in the market. Only buy this stock if you truly believe the company will improve!
- 0-59 = Low confidence – Warning! There are better stocks in the market. Due to the low score, you should consider looking at other stocks.
Table of Contents
The following links will direct you to key topics to help answer the question, is American International Group (AIG) stock a good buy?
- American International Group Company History
- MOS
- Meaning
- Moat
- Management
- 4M Score
- Is American International Group (AIG) stock a good buy?
1. American International Group Group Company History
- Founded: American International Group (AIG) was founded in 1919 by Cornelius Vander Starr in Shanghai, China, initially as an insurance agency.
- Expansion: AIG expanded rapidly across Asia, Latin America, and Europe, becoming one of the first American insurance companies with a global presence.
- U.S. Entry: In the 1940s, AIG moved its headquarters to New York City and began expanding its operations across the United States.
- Growth: Throughout the 20th century, AIG grew through acquisitions and diversification, becoming a leader in insurance, financial services, and asset management.
- Global Reach: By the 1990s, AIG had established itself as a major player in the global insurance market, offering a wide range of products, including life insurance, property and casualty insurance, and retirement services.
- 2008 Financial Crisis: AIG faced a severe crisis during the 2008 financial collapse due to its involvement in credit default swaps. The U.S. government provided a massive bailout to prevent its collapse, making it one of the most notable rescues of the crisis.
- Recovery and Restructuring: Post-crisis, AIG restructured, selling off non-core assets and refocusing on its core insurance businesses, successfully repaying the government bailout by 2012.
- Headquarters: AIG is headquartered in New York City and remains a significant player in the global insurance industry, with a focus on innovation and risk management.
2. MOS (Margin Of Safety)
When investing in a company, the first step is to look at the financials. Fortunately, Tykr does this for us automatically. The higher the score, the stronger the financials and the safer the investment. The higher the MOS, the higher the potential returns you can make.
- Summary: Overpriced
- Score: 39
- MOS: 1%
To see the most up-to-date Summary, Score, and MOS, please log into Tykr.
3. Meaning
When investing in a company, it’s important to know how a company makes money. A mature business model has multiple streams of revenue which allow the company to weather downturns in the economy.
Here is how American International Group makes money:
- Insurance Premiums: AIG earns revenue primarily from collecting premiums for various types of insurance policies, including property and casualty, life insurance, and health insurance.
- Investment Income: The company generates income from investing the premiums it collects, including investments in bonds, stocks, and other financial instruments.
- Reinsurance: AIG earns money by providing reinsurance services, which involves offering insurance to other insurance companies to help them manage their risks.
- Fees and Commissions: Revenue comes from fees and commissions earned through selling insurance policies and providing related financial services.
- Underwriting Profits: AIG makes money from underwriting insurance policies, which involves assessing and managing risks and earning profits if claims are lower than expected.
- Asset Management: The company earns income through its asset management division by managing investments for clients and earning management fees.
- Global Operations: AIG’s diverse global operations contribute to its revenue, including insurance and investment services offered in various international markets.
- American General Corporation
- Fidelity & Deposit Company of Maryland
- Hartford Steam Boiler Inspection and Insurance Company
- SunAmerica Inc.
- MetLife’s U.S. Life Insurance Business
4. Moat
When investing in a company, it’s important to understand how a company ranks against other companies in the same sector and industry. Based on the Score, here is how American International Group, Inc. stacks up against other companies.
- Berkshire Hathaway Inc.(BRK-B) – 78
- Berkshire Hathaway Inc.(BRK-A) – 78
- The Hartford Financial Services Group, Inc.(HIG-PG) – 72
- Assurant, Inc. 5.25% Subordinat.(AIZN) – 72
- The Hartford Financial Services Group, Inc.(HIG) – 72
- American International Group, Inc.(AIG) – 39
To see the most up-to-date Summary, Score, and MOS and each stock, please log into Tykr.
5. Management
When investing in a company, it’s important to understand who the CEO is, what they have accomplished in the past, and how they have helped this company grow. Good leaders typically have stronger cultures, less turnover, and better returns in the stock market.
- Operational Efficiency: Peter ZaffinoImproved operational efficiency at AIG by implementing cost-saving measures and streamlining processes, enhancing the company’s financial performance.
- Strategic Divestitures: Oversaw the strategic divestiture of non-core assets, focusing AIG on its core insurance and financial services businesses, which strengthened its balance sheet.
- Debt Reduction: Led efforts to reduce AIG’s debt significantly, improving the company’s financial stability and credit rating.
- Leadership in Digital Transformation: Advanced AIG’s digital transformation initiatives, enhancing technology capabilities and modernizing the company’s operations and customer service.
- Strengthening Core Insurance Operations: Reinforced AIG’s core insurance businesses, including property and casualty insurance, by investing in growth and innovation within these areas.
- Enhanced Capital Management: Managed AIG’s capital effectively, including share repurchases and dividend policies, to return value to shareholders and support the company’s long-term growth.
6. 4M Score
All of our homework on this company leads up to the 4M Score. A lot of investors only look at the numbers. Yes, it’s important to look at the first M (MOS) which is the math part of investing but it’s also important to look past the numbers and also look at the Meaning, Moat, and Management. If all 4Ms pass, we should have high confidence in buying this stock.
What 4M score are we going for?
- 80-100 = High confidence – Yay! You should have high confidence buying this stock. It passes all 4M!
- 60-79 = Moderate confidence – Alert! There may be better stocks in the market. Only buy this stock if you truly believe the company will improve!
- 0-59 = Low confidence – Warning! There are better stocks in the market. Due to the low score, you should consider looking at other stocks.
👉 The 4M Score of American International Group (AIG) is 65/100.
To see the most up-to-date 4M Score, please log into Tykr.
7. Is American International Group (AIG) stock a good buy?
Some of the top questions investors can have is American International Group (AIG) stock a good buy or should I buy American International Group (AIG) stock?
American International Group (AIG) is a notable investment due to its strong position in the global insurance market and diverse range of insurance products. The company provides various insurance services, including property and casualty, life insurance, and retirement solutions.
AIG has made strategic moves, such as reducing debt and focusing on core insurance operations, improving its financial stability. Acquisitions like the purchase of Validus Holdings have also enhanced its market presence.
However, investors should be aware of potential risks, including the volatility of the insurance market and regulatory changes that could impact performance.
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To truly know if American International Group is a good stock to buy or sell, we recommend you log into Tykr. Within seconds you can see the Summary, Score, MOS, and 4M Score.
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The Summary, Score, and MOS of this stock may have changed since the posting of this review. Please login to Tykr to see up-to-date information.