Greenlight Capital Re's (NASDAQ:GLRE) investors will be pleased with their respectable 45% return over the last three years
By buying an index fund, you can roughly match the market return with ease. But if you choose individual stocks with prowess, you can make superior returns. For example, Greenlight Capital Re, Ltd. (NASDAQ:GLRE) shareholders have seen the share price rise 45% over three years, well in excess of the market return (30%, not including dividends). However, more recent returns haven't been as impressive as that, with the stock returning just 27% in the last year.
So let's investigate and see if the longer term performance of the company has been in line with the underlying business' progress.
Check out our latest analysis for Greenlight Capital Re
To quote Buffett, 'Ships will sail around the world but the Flat Earth Society will flourish. There will continue to be wide discrepancies between price and value in the marketplace...' One flawed but reasonable way to assess how sentiment around a company has changed is to compare the earnings per share (EPS) with the share price.
Greenlight Capital Re became profitable within the last three years. That would generally be considered a positive, so we'd expect the share price to be up.
The company's earnings per share (over time) is depicted in the image below (click to see the exact numbers).
Dive deeper into Greenlight Capital Re's key metrics by checking this interactive graph of Greenlight Capital Re's earnings, revenue and cash flow.
A Different Perspective
It's nice to see that Greenlight Capital Re shareholders have received a total shareholder return of 27% over the last year. There's no doubt those recent returns are much better than the TSR loss of 6% per year over five years. This makes us a little wary, but the business might have turned around its fortunes. Before forming an opinion on Greenlight Capital Re you might want to consider these 3 valuation metrics.
If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of companies that have proven they can grow earnings.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on American exchanges.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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