Greenlight Capital (GLRE) Hits 52-Week High Post-Q2 Earnings - Analyst Blog

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Riding on a steady growth momentum, shares of Greenlight Capital Re Ltd. ( GLRE ) scaled a new 52-week high at $35.09 on Sep 3, following solid year-over-year performance in second-quarter 2014.

Consistent improvement in core operations have been fuelling a positive impetus for this Zacks Rank #3 (Hold) stock.  Notably, this property-casualty reinsurer's shares rose about 5.3% since the beginning of 2014.

Yesterday's closing price represents a strong one-year return of about 30.0%, against 27.4% clocked by the Nasdaq index. Average volume of shares traded over the last three months stands at approximately 130.5K, while about 170.3K shares exchanged hands in yesterday's trading session.

On Aug 4, Greenlight Capital reported second-quarter 2014 operating earnings per share (EPS) of $2.89, after posting a loss in the previous quarter. EPS was also higher than 76 cents in the year-ago quarter, although it fell short of the Zacks Consensus Estimate of $3.01 by 4%.

The year-over-year upsurge was led by higher investment income that grew about 370%. Results also benefited from lower loss and loss adjusted expenses as well as acquisitions costs, overall reducing total expense by about 30%. As a result, book value per share and liquidity witnessed improvement.

Despite a challenging competitive underwriting environment, Greenlight Capital boasts of a strong pipeline of lucrative business opportunities that are likely to drive growth going forward. Moreover, the company's investment portfolio is benefiting from buoyant equity markets.

Greenlight Capital's focus on conservative risk management initiatives are also showing results, as reflected in its improved investment and cash position, along with a debt-free balance sheet. Overall, these factors instill confidence in investors and score well with ratings agencies too.

Stocks to Consider

Investors interested in insurance stocks could consider AmTrust Financial Services Inc. ( AFSI ),Global Indemnity plc ( GBLI ) and Mercury General Corp. ( MCY ). All these stocks sport a Zacks Rank #1 (Strong Buy).


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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.




This article appears in: Investing , Business , Earnings , Stocks

Referenced Stocks: EPS , GLRE , AFSI , MCY , GBLI

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