Should Value Investors Buy Reinsurance Group of America (RGA) Stock?

Oakmark Funds recently released its second-quarter investor letter – a copy of which is available for download here. In their recent letter to investors, Oakmark Funds announced that OAKMX portfolio returned 23.0% in the second quarter, as compared to 20.5% of the S&P 500 Index. You should check out Oakmark Funds top 5 stock picks for investors to buy right now, which could be the biggest winners of the stock market crash.

In the said letter, Oakmark Funds highlighted a few stocks and Reinsurance Group Of America Inc (NYSE:RGA) is one of them. Reinsurance Group Of America Inc (NYSE:RGA) is a reinsurance company. Year-to-date, Reinsurance Group Of America Inc (NYSE:RGA) stock lost 56.7% and on July 9th it had a closing price of $67.56. Here is what Oakmark Funds said:

“RGA primarily reinsures life insurance contracts. As the coronavirus spreads throughout the world, the company’s share price collapsed to levels that, in our view, reflected a worst-case scenario. Our discussions with management, as well as our own scenario analysis, further buttressed our assessment, and we established a position at a price well below the company’s tangible book value. RGA also maintains a conservative balance sheet, and we expect it will earn double-digit returns on tangible equity on average over time. We were excited to purchase this stock as it is trading for just a mid-single digit multiple of our estimate of normalized earnings per share.”

In Q1 2020, the number of bullish hedge fund positions on Reinsurance Group Of America Inc (NYSE:RGA) stock increased by about 11% from the previous quarter (see the chart here), so a number of other hedge fund managers seem to agree with RGA’s upside potential. Our calculations showed that Reinsurance Group Of America Inc (NYSE:RGA) isn’t ranked among the 30 most popular stocks among hedge funds.

The top 10 stocks among hedge funds returned 185% since the end of 2014 and outperformed the S&P 500 Index ETFs by more than 109 percentage points. We know it sounds unbelievable. You have been dismissing our articles about top hedge fund stocks mostly because you were fed biased information by other media outlets about hedge funds’ poor performance. You could have doubled the size of your nest egg by investing in the top hedge fund stocks instead of dumb S&P 500 ETFs. Below you can watch our video about the top 5 hedge fund stocks right now. All of these stocks had positive returns in 2020.

Video: Top 5 Stocks Among Hedge Funds

At Insider Monkey we scour multiple sources to uncover the next great investment idea. There is a lot of volatility in the markets and this presents amazing investment opportunities from time to time. For example, this trader claims to deliver juiced up returns with one trade a week, so we are checking out his highest conviction idea. A second trader claims to score lucrative profits by utilizing a “weekend trading strategy”, so we look into his strategy’s picks. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. We recently recommended several stocks partly inspired by legendary Bill Miller’s investor letter. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 in February after realizing the coronavirus pandemic’s significance before most investors. You can subscribe to our free enewsletter below to receive our stories in your inbox:

Disclosure: None. This article is originally published at Insider Monkey.