Enterprising Investor Forum

Screening ideas: Montpelier Re (MRH) Wednesday, March 19, 2008

We thought that it was time to post another screen for our readers. Our aim was to try and find interesting companies to research that were trading at a discount to book value, near 52-week lows and that had demonstrated better than average performance in their respective industry.

We ran the follwoing screen on the MSD Delux Screener:

• Last price near 52-week low
• Price to book between 0.75 and 1
• Current P/E Ratio < Industry Average
• Debt to Equity Ratio < Industry Average
• Net Profit Margin > Industry Average
• Return on Equity > Industry Average

… and as you could have guessed by the title of this post and the logo, the number 1 spot was filled by Montpelier Re (MRH).

Montpelier Re is a Bermuda-based reinsurance company founded by White Mountains Insurance and British reinsurance broker Benfield Group in December 2001. The firm’s three product areas are property specialty, property catastrophe for earthquakes and hurricanes, and specialty reinsurance for aviation, sabotage, and marine risks, among others. Property specialty and other specialty products make up about two thirds of sales. Montpelier Re sells its reinsurance via brokers.

Despite conditions not being ideal, MRH is backed by significant capital and should be well placed to tackle the current economic climate. What were the other companies that came up on the screen? Well, here is the whole list:

1. Montpelier Re (MRH)
2. Aircastle Ltd (AYR)
3. CNA Surety Corp (SUR)
4. Platinum Underwriters Holdings (PTP)
5. IPC Holdings (IPCR)
6. PartnerRe (PRE)

Enjoy your research!