Greenlight Capital Re Ltd. Stock Downgraded (GLRE)

NEW YORK ( TheStreet) -- Greenlight Capital Re (Nasdaq: GLRE) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its revenue growth, reasonable valuation levels and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, generally poor debt management and feeble growth in the company's earnings per share.

Highlights from the ratings report include:
  • Despite its growing revenue, the company underperformed as compared with the industry average of 13.1%. Since the same quarter one year prior, revenues slightly increased by 6.0%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. Compared to other companies in the Insurance industry and the overall market on the basis of return on equity, GREENLIGHT CAPITAL RE LTD has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Insurance industry. The net income has significantly decreased by 126.0% when compared to the same quarter one year ago, falling from -$15.96 million to -$36.07 million.
  • The debt-to-equity ratio of 1.23 is relatively high when compared with the industry average, suggesting a need for better debt level management.

Greenlight Capital Re, Ltd., through its subsidiaries, operates in the property and casualty reinsurance business in the United States, Europe, the Caribbean, and internationally. The company has a P/E ratio of 9.2, equal to the average insurance industry P/E ratio and below the S&P 500 P/E ratio of 17.7. Greenlight Capital Re has a market cap of $724.1 million and is part of the financial sector and insurance industry. Shares are up 0.5% year to date as of the close of trading on Friday.

You can view the full Greenlight Capital Re Ratings Report or get investment ideas from our investment research center.

-- Written by a member of TheStreet Ratings Staff

TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.
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