Goldman Sachs’ List Of Stocks That Hedge & Mutual Funds Love & Hate: 28 Stocks On The Mutual and Hedge Funds Radar

5. The Progressive Corporation (NYSE:PGR)

Number of Hedge Fund Holders In Q2 2024: 89

Category: Most popular with HFs and overweight among mutual funds

The Progressive Corporation (NYSE:PGR) is an American auto and homeowner insurance company. Since it’s a pure play insurance company, the firm’s performance depends on its expense ratio, investment income, and premium growth. As a result, The Progressive Corporation (NYSE:PGR) has to focus on its expenses quite a bit since premiums have already grown lately and lower interest rates mean that its investment income also falls. Additionally, the firm is also spending heavily on marketing which is stressing its expense ratio. This might force The Progressive Corporation (NYSE:PGR) to hike premiums in the future and lead to customer losses. However, the market is quite optimistic about the company, as its shares are up 56.8% year to date and 61% over the past twelve months. In a September analyst note, Goldman increased The Progressive Corporation (NYSE:PGR)’s share price target to $280 from $262 and kept a Buy rating on the stock. It highlighted that the firm’s auto policies in force and improving loss ratios for the segment, but cautioned about growing expenses.

Middle Coast Investing mentioned The Progressive Corporation (NYSE:PGR) in its Q3 2024 investor letter. Here is what the fund said:

“Progressive Insurance (NYSE:PGR) is the best example of both a macro and micro transition. Used car repair cost inflation (macro) hurt its profitability. It was early in raising prices to deal with that, and has been growing new policies in force much faster than competitors. As it has overcome the cost inflation issue, its profits have soared, and should continue to grow. The stock price has doubled in the last 14 months.”