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AIG: Don't Sleep On Carl Icahn


The likelihood of AIG actually breaking might be getting smaller.

However, it’s closer than ever to a ‘buy’ rating from us.

Here’s what I need from the company.

While I've talked about breaking up the big financial companies - with Bank of America and Citi being in the crosshairs, American International General (NYSE:AIG) might have enough upside to make it compelling without a breakup. Shares of AIG are down 10% in 2016 and trading at 70% of book value, but AIG has already been quietly breaking itself up.

Earlier this summer I talked about Icahn slowplaying AIG; the idea being that a breakup would be the ultimate win, yet, Icahn has gone quiet with voicing his support for a breakup. That's in part because both he and John Paulson now have board seats at AIG. So, Icahn has either realized that it might be more difficult than he realized to breakup AIG, or the pushback from CEO Peter Hancock has forced him to lie in wait as he works on a plan to oust Hancock and install a CEO that would break up AIG.

The problem with AIG

Just like the big banks, AIG remains somewhat of a macro bet on interest rates. Without a major change in rates, AIG will be limited in the money it can make. But it's a slowly improving story nonetheless, making progress when it comes to slimming down and cutting costs.

The big catalyst I'm looking forward to is:...