Insufficient Growth At American International Group, Inc. (NYSE:AIG) Hampers Share Price
With a price-to-earnings (or “P/E”) ratio of 11.9x American International Group, Inc. (NYSE:AIG) may be sending bullish signals at the moment, given that almost half of all companies in the United States have P/E ratios greater than 20x and even P/E’s higher than 35x are not unusual. Nonetheless, we’d need to dig a little deeper to determine if there is a rational basis for the reduced P/E.
With earnings growth that’s superior to most other companies of late, American International Group has been doing relatively well. One possibility is that the P/E is low because investors think this strong earnings performance might be less impressive moving forward. If not, then existing shareholders have reason to be quite optimistic about…
