Two reinsurance firms backed by prominent hedge funds are considered good investments as their share price performance has yet to benefit from the sector's improved pricing outlook, according to Barron's.

Both Greenlight Capital Re and Third Point Reinsurance (TPRE), linked to David Einhorn's Greenlight Capital (GLRE) and Dan Loeb's Third Point respectively, "trade well below book value and look appealing," the U.S. financial newspaper said.

Supporting its view for Greenlight Capital Re was a possible sale of the company which could come out of an ongoing strategic review of the business, while Third Point Re "may be poised for a comeback," it said.

The reinsurance sector has suffered in recent years from falling product pricing, fueled by large amounts of capital coming into the space, and increased natural disaster payouts.

However, the newspaper noted that better rates and terms for reinsurers, as well as improved returns from investments, were helping such firms.

Barron's cautioned that natural disasters could undermine its thesis on both companies, in particular Third Point Re, which it said had expanded its catastrophe reinsurance business this year and has exposure to Florida.

Hurricane Dorian, the second-strongest Atlantic storm on record that crashed into the Bahamas on Sunday, could still make landfall in the Sunshine State in the coming days, according to the National Hurricane Center. Even without a direct hit, Dorian could still cause significant damage to Florida through high winds, torrential rain and storm surges.

Both Greenlight Capital Re and Third Point Reinsurance didn't immediately respond to separate requests for comment.