American International Group Stock Is Undervalued

American International Group’s stock (NYSE: AIG) has lost around 9% YTD, while the S&P500 is up 15% over the same period. Further, at its current price of $58 per share, it is trading 18% below its fair value of $71 – Trefis’ estimate for American International Group’s valuation.

Interestingly, AIG stock had a Sharpe Ratio of 0.1 since early 2017, which is lower than 0.6 for the S&P 500 Index over the same period. This compares with the Sharpe of 1.3 for the Trefis Reinforced Value portfolio. Sharpe is a measure of return per unit of risk, and high-performance portfolios can provide the best of both worlds.