(RTTNews) - Wednesday, Credit Suisse initiated coverage of Greenlight Capital Re, Ltd. (GLRE: News ) stock with a Neutral rating and a price target of $20.

Analyst Zaremski noted that although Greenlight is headed by a seasoned team of insurance industry veterans, given the firm's lack of a long-term track record, he believes its most attractive proposition is investors' ability to gain exposure to the company's asset side of the balance sheet, run by GLRE's founder and chairman, David Einhorn.

The analyst said that David Einhorn founded his hedge fund, Greenlight Capital, in 1996, and through year-end 2008 has posted 20% compounded annual returns. That said, even David Einhorn was not able to avoid the markets' carnage in 2008, when GLRE's fund lost about 18%, ending 12 consecutive years of positive performance.
The analyst added that Greenlight's insurance operation started writing premiums in late 2006 and as a result has a relatively short history. Over the past three years, GLRE has chosen not to deploy the vast majority of its underwriting capacity (0.45 times premium-to-capital ratio versus 0.75 times industry average) therefore book value remains highly correlated with investment returns.

Currently, GLRE is down $0.26 or 1.37% and trading at $18.74.

To receive FREE breaking news email alerts for GREENLIGHT CAPITAL RE LT and others in your portfolio

by RTT Staff Writer

For comments and feedback: contact editorial@rttnews.com