Two Winners and One Loser in Dan Loeb’s Portfolio: Yahoo! Inc. (YHOO), American International Group, Inc. (AIG)

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A Value Insurance Play

AIG was the second biggest position of Dan Loeb in the third quarter 2012. He owned 23.5 million shares, accounting for 15.2% of his total portfolio. In the last 12 months, AIG has experienced a nearly 56% gain. The global insurance giant has repaid a $182 billion funding from the US government in full. AIG has been a popular holding for several famous hedge fund managers, including George Soros, David Tepper, and Leon Cooperman. Recently, AIG has decided to focus on its core business. It sold out its 90% stake in the airplane leasing global leader for around $5.28 billion. Previously, it also sold AIA business, a big Asian life insurer and American Life Insurance Company. AIG no doubt is still the leader in the global property and casualty insurance market. It is also the biggest US life insurance and retirement service provider with more than 86 million customers worldwide. At the current trading price of $36.18 per share, AIG is valued at 9.2x forward P/E and 0.5x P/B.

Foolish Bottom Line

AIG looks cheap now. With its refocus on its core operations, the near term future looks decent, while it is valued cheaply in the market. Apple also looks cheap with its huge cash balance and a strong technology base. Both AIG and Apple are definitely value plays.  Yahoo! is more of an opportunistic play on its turnaround efforts. If it can leverage on its current customer base and its existing assets, it could deliver a decent return in the future.

The article Two Winners and One Loser in Dan Loeb’s Portfolio originally appeared on Fool.com and is written by Anh HOANG.

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