AIG on the Path to Nowhere
It's had way too much government involvement.
Asian stocks rose overnight. The Hang Seng and the Nikkei were up 1.73% and 0.2%, respectively. European stocks were in positive territory early this morning, too. And here in the US, we're currently trading higher.
Here's what I'm focused on this fine Monday morning:
American International Group (AIG):
The company that's world renowned for its insurance business (and unfortunately, for the help it's received from Uncle Sam), released its third quarter on Friday.
After seeing the release, I'm left like a deer in headlights.
1. There's a part of me that continues to think that because the government has been elbow-deep in this company, it's ultimately not going anywhere. On the other hand, because the government has been elbow-deep, it's ultimately not going anywhere. (That's not a mistake. Think about it for a minute.)
2. While part of me hates the fact that I've missed this party and would love to take advantage of the recent pullback, the rational side of me still wants to see several more quarters of performance before trying to game what the next several years may look like.
3. Because of my clear lack of conviction, I'll gladly continue sitting this one out on the sidelines.
General Electric (GE):
Fellow Minyan Justin Sharon pointed out in his article on Friday, Upgrades & Downgrades: General Electric Gets a Jolt, that Sanford Bernstein and Oppenheimer bumped up their ratings.
1. Although the shares have bounced like a ball off their lows, they still have a long way to go, and people don't realize the full potential of the company or the stock.
2. I think that the shares go to at least the high teens within the next year, and that the mid-$20s is doable within two years' time.
3. The 2010 estimate seems light, and it's eventually going to get bumped up.
4. In an ideal world, waiting for a pullback would be nice, but I think the stock is a good deal right where it's trading. And although I may be getting a few chuckles right now, in a couple of years, I think I'll be proven spot-on.
The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.
Copyright 2011 Minyanville Media, Inc. All Rights Reserved.
Daily Recap Newsletter