GLRE
Greenlight Capital Re, Ltd.
$17.02
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Strong
·
Conviction
Undervalued
Trading 76.8% below fair value
You pay
$17.02
Bear
$46.30
Fair
$73.33
Bull
$73.33
Bear
$46.30
+172.1%
ROTCE 9.2% → 2.53x TBV
Fair
$73.33
+331.0%
ROTCE 12.3% → 4.00x TBV
Bull
$73.33
+331.0%
ROTCE 14.2% → 4.00x TBV
Key Value Driver
ROTCE (12.3%) vs. cost of equity (6.1%)
Implied Market Multiple
0.93x
Summary
With ROTCE of 12.3% vs. 6.1% cost of equity, fair P/TBV is 4.00x on $18.33 tangible book, implying $73.33 per share.
Warnings
Traditional cash flow models don't work well for banks — lending activity distorts how much cash the business actually generates.
Common valuation shortcuts don't apply here — for banks, interest payments are a core business cost, not overhead.
Key Risks
- Book value quality matters as much as level — check loan loss reserves
- Interest rate sensitivity creates non-linear earnings surprises
- Insurance reserving is actuarial, not financial — errors emerge slowly