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Should Value Investors Buy American International Group (AIG) Stock?

While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.

Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.

On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.

One company to watch right now is American International Group (AIG). AIG is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock is trading with P/E ratio of 7.68 right now. For comparison, its industry sports an average P/E of 8.27. Over the last 12 months, AIG's Forward P/E has been as high as 14.69 and as low as 7.26, with a median of 9.18.

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Another notable valuation metric for AIG is its P/B ratio of 0.85. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. AIG's current P/B looks attractive when compared to its industry's average P/B of 2.11. Within the past 52 weeks, AIG's P/B has been as high as 1.17 and as low as 0.68, with a median of 0.92.

Finally, we should also recognize that AIG has a P/CF ratio of 3.73. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. AIG's current P/CF looks attractive when compared to its industry's average P/CF of 8.93. Within the past 12 months, AIG's P/CF has been as high as 3.87 and as low as 1.96, with a median of 2.60.

If you're looking for another solid Insurance - Multi line value stock, take a look at Mnchener RckversicherungsGesellschaft (MURGY). MURGY is a # 2 (Buy) stock with a Value score of A.

Mnchener RckversicherungsGesellschaft is trading at a forward earnings multiple of 9.83 at the moment, with a PEG ratio of 0.54. This compares to its industry's average P/E of 8.27 and average PEG ratio of 0.77.

MURGY's price-to-earnings ratio has been as high as 13.63 and as low as 7.92, with a median of 10.18, while its PEG ratio has been as high as 0.76 and as low as 0.46, with a median of 0.53, all within the past year.

Furthermore, Mnchener RckversicherungsGesellschaft holds a P/B ratio of 2.01 and its industry's price-to-book ratio is 2.11. MURGY's P/B has been as high as 2.10, as low as 0.87, with a median of 1.71 over the past 12 months.

These are only a few of the key metrics included in American International Group and Mnchener RckversicherungsGesellschaft strong Value grade, but they help show that the stocks are likely undervalued right now. When factoring in the strength of its earnings outlook, AIG and MURGY look like an impressive value stock at the moment.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

American International Group, Inc. (AIG) : Free Stock Analysis Report

M?nchener R?ckversicherungs-Gesellschaft (MURGY) : Free Stock Analysis Report

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Zacks Investment Research