Hedge Funds Love AIG, but Analysts Are Cautious

There are a lot of reasons why AIG (NYSE:AIG) surged as much as 5.8 percent following its fourth-quarter report on Thursday after the markets closed. Topping the list is the fact that the Department of the Treasury had sold the last of its stake in the company, ending a long and painful post-crisis chapter in the company’s history. Operational profit despite Superstorm Sandy and a myriad of losses associated with discontinued operations also created a buzz.

“When history is written, we will look back and see that by the end of 2012, a new era for AIG had begun,” commented president and CEO Robert Benmosche in the earnings release. That new era begins with delivering a positive return to American taxpayers for the massive and controversial bailout that the insurer received during the financial crises.

In many ways, successful repayment of the bailout helped restore the company’s tattered image, and looking ahead AIG could once again become a Wall Street darling. In fact, if hedge funds are trend setters, that’s already happening. CNN reports that at the end of the fourth quarter, a Goldman Sachs report showed that AIG was the most widely-held stock among the 725 hedge funds that were tracked. Apple (NASDAQ:AAPL), the previous favorite, had dropped to number three, with the second spot going to Google (NASDAQ:GOOG).