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Should You Invest in American International Group (AIG)?

Soumya Eswaran
·4 min read

Aristotle Capital Management, LLC, an investment management company, released its “Value Equity Strategy” third quarter 2024 investor letter. A copy of the letter can be downloaded here. The U.S. share market reached record highs in the quarter, with the S&P 500 Index rising 5.89%. The market showed wider gains, unlike the previous quarter, with the S&P 500 Equal Weight Index beating the cap-weighted S&P 500 Index by 3.71%. The composite returned 6.47% gross of fees (6.39% net of fees) in the third quarter underperforming the 9.43% return of the Russell 1000 Value Index and outperforming the 5.89% return of the S&P 500 Index. Security selection led the composite to underperform in the quarter relative to the Russell 1000 Value Index, while allocation had a slight negative impact. In addition, you can check the fund’s top 5 holdings to determine its best picks for 2024.

Aristotle Capital Value Equity Strategy highlighted stocks like American International Group, Inc. (NYSE:AIG), in the third quarter 2024 investor letter. American International Group, Inc. (NYSE:AIG) is an insurance company that offers products for commercial, institutional, and individual customers. The one-month return of American International Group, Inc. (NYSE:AIG) was 5.79%, and its shares gained 23.35% of their value over the last 52 weeks. On October 11, 2024, American International Group, Inc. (NYSE:AIG) stock closed at $77.23 per share with a market capitalization of $49.732 billion.

Aristotle Capital Value Equity Strategy stated the following regarding American International Group, Inc. (NYSE:AIG) in its Q3 2024 investor letter:

"Established in 1919 and headquartered in New York, American International Group, Inc. (NYSE:AIG) is one of the largest global insurance companies. AIG provides a comprehensive range of property and casualty (P&C) insurance to businesses and individuals in over 190 countries and jurisdictions around the world. The company also has a ~48% stake in Corebridge Financial (Corebridge), AIG’s old Life & Retirement segment.

AIG’s government bailout following the 2008 global financial crisis left the company on a 10+ year journey to transform its business (including five CEOs) by streamlining operations and attempting to improve its image with the public and investor community. Since taking over the General Insurance business in 2017 and assuming the role of CEO in 2021, Peter Zaffino has restructured underwriting and increased levels of reinsurance to reduce risk and control volatility, implemented a new structure for its High Net Worth business, divested non-core divisions such as crop risk and personal travel, and separated its Life & Retirement segment into the independently publicly traded company Corebridge. Following these actions, AIG will be a purely General Insurance focused business, with roughly 75% of its premiums tied to commercial and 25% to personal policies. We believe with Mr. Zaffino’s emphasis on risk-adjusted returns, AIG has become a stronger, more focused organization..." (Click here to read the full text)

A professional advisor helping a client with an insurance policy, highlighting the company’s attention to customer service.

American International Group, Inc. (NYSE:AIG) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 61 hedge fund portfolios held American International Group, Inc. (NYSE:AIG) at the end of the second quarter which was 54 in the previous quarter. American International Group, Inc.'s (NYSE:AIG) adjusted after tax income was $775 million, or $1.16 per diluted share, in the second quarter 2024, representing 38% year-over-year increase in earnings per share. While we acknowledge the potential of American International Group, Inc. (NYSE:AIG) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

In another article, we discussed American International Group, Inc. (NYSE:AIG) and shared Goldman Sachs top mutual fund manager stock picks. In addition, please check out our hedge fund investor letters Q3 2024 page for more investor letters from hedge funds and other leading investors.

READ NEXT: Michael Burry Is Selling These Stocks and A New Dawn Is Coming to US Stocks.

Disclosure: None. This article is originally published at Insider Monkey.