Einhorn’s Reinsurer Rallies as UBS Upgrades to Buy
Greenlight Capital Re Ltd. (GLRE), the reinsurer that counts hedge-fund manager David Einhorn as its chairman, rose the most since August as UBS AG raised its rating on the firm to buy and said the stock will rebound from a slump.
Greenlight Re jumped 3.6 percent to 23.21 at 4 p.m. in New York. Analysts led by Brian Meredith increased their price target on the Cayman Islands-based insurer to $27 from $25.50. The stock had dropped 5.4 percent this year through yesterday.
Einhorn established the reinsurer in 2004 and invests premiums through an affiliate of his hedge fund Greenlight Capital Inc. The firm is trading below book value, a measure of assets minus liabilities, compared with a historical average of about 22 percent higher than that metric, the analysts said.
Greenlight Re “is a unique way to invest with the successful hedge fund,” the analysts wrote in a note today. They previously had a neutral rating on the stock.
The reinsurer has “largely addressed” underwriting losses related to commercial vehicle policies it wrote in prior years, the analysts said. The company’s third-quarter profit was hurt after higher than expected claims costs on contracts protecting dump trucks and garbage haulers.
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