We recently published a list of Top 10 Stocks to Watch as Investors Brace for Potential Recession. In this article, we are going to take a look at where The Progressive Corporation (NYSE:PGR) stands against other top stocks to watch as investors brace for potential recession.
President Donald Trump’s new reciprocal tariff announcement is hammering stock markets around the world as countries face a new reality and trade dynamics. The rising volatility has increased recession risks. Goldman Sachs recently said that it sees a 35% chance of a recession in the next 12 months, up from 20% previously. The bank also cut its 2025 GDP forecast to just 1% and raised its year-end unemployment rate outlook by 0.3 percentage points to 4.5%.
China and key European countries are beginning to respond to the latest tariffs and will likely impose retaliatory tariffs on US products, causing a further downturn in consumer sentiment. Kara Reynolds, an economist at American University, told ABC News that a pullback in spending from consumers and businesses due to these uncertainties can tip the US into a recession.
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For this article, we picked 10 stocks currently on Wall Street’s radar. With each stock, we have mentioned the number of hedge fund investors. Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
A team of accountants in a boardroom, discussing strategic moves of an insurance company.
The Progressive Corporation (NYSE:PGR)
Number of Hedge Fund Investors: 95
Jed Ellerbroek from Argent Capital explained in a latest program on Schwab Network why he likes The Progressive Corporation (NYSE:PGR).
“Progressive is our favorite defensive growth business. When I say defensive, I mean not economically sensitive—we’re all buying auto insurance whether the stock market is up or down, whether the economy is growing rapidly or in recession. We all have to have that auto insurance, so that stable demand is a good thing. You want some of that in your portfolio. Progressive pairs that with pretty impressive growth, and that growth is largely coming through market share gains, where they are outgrowing and outcompeting their peers like State Farm, Geico, Allstate, etc.”
Artisan Mid Cap Value Fund stated the following regarding The Progressive Corporation (NYSE:PGR) in its Q4 2024 investor letter:
” On the positive side, our financials holdings delivered strong absolute and relative returns in 2024, and each of our biggest contributors—First Citizens, M&T Bank and Progressive—was in the financials sector. We exited The Progressive Corporation (NYSE:PGR), one of the largest personal auto insurers in the US, this quarter after a long holding period that began in 2007. As a long-time holding, Progressive is an example of how we put our process into motion. We were able to purchase it at an attractive price, but most of our holding period return came from the value created by the business itself. We recognized the strength of its business model demonstrated by consistent free cash flow generation and above average returns on equity and had a high regard for management, which had a proven track record of pricing discipline through the cycle and prudent capital allocation. Due to its success, Progressive’s market capitalization now exceeds the upper limit of our mid-cap investment universe.”
Overall, PGR ranks 7th on our list of top stocks to watch as investors brace for potential recession. While we acknowledge the potential of PGR, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than PGR but that trades at less than 5 times its earnings, check out our report about this cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.