Wedgewood Partners, an investment management firm, published its first-quarter 2022 investor letter – a copy of which can be downloaded here. For the first quarter of 2022, the fund’s Composite (net) declined by -10.6%. The S&P 500 Index declined by -4.6%. The Russell 1000 Growth Index declined -by 9.0%, while the Russell 1000 Value Index declined -by 0.7%. Try to spend some time taking a look at the fund’s top 5 holdings to be informed about their best picks for 2022.
In its Q1 2022 investor letter, Wedgewood Partners mentioned The Progressive Corporation (NYSE:PGR) and explained its insights for the company. Founded in 1937, The Progressive Corporation (NYSE:PGR) is a Mayfield, Ohio-based insurance company with a $65.5 billion market capitalization. The Progressive Corporation (NYSE:PGR) delivered a 9.22% return since the beginning of the year, while its 12-month returns are up by 11.66%. The stock closed at $112.11 per share on April 15, 2022.
Here is what Wedgewood Partners has to say about The Progressive Corporation (NYSE:PGR) in its Q1 2022 investor letter:
“Progressive was a top contributor to performance during the quarter. Much of the outperformance was likely driven by a market that rotated out of high multiple technology stocks and into companies with more direct earnings exposure to higher interest rates. In the world of U.S. Large Cap Growth investing, banks and insurers have long been relative pariahs – so out of favor that they make up just a low single-digit (or even zero) percent of most of the major domestic large growth indices. However, that hardly means they are all bad businesses. Progressive has long proven to be an exceptional growth company with a laser-like focus on balancing growth with exceptional returns by methodically managing and segmenting its risks and all the while aggressively reinvesting in marketing and expanded distribution. Many of Progressive’s competitors have significant legacy distribution arrangements that have led to overly narrow distribution. Although it has been quite some time – nearly a decade – since P&C insurers have raised personal policy rates to the extent that we have seen over the past 6 months, we note that insurance customers tend to shop more when policy prices rise. Progressive’s independent and direct distribution allows the Company to reach a much broader audience, which positions it well to sign customers away from narrow-focused competitors as rates rise for the first time in recent memory.”
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Our calculations show that The Progressive Corporation (NYSE:PGR) fell short and didn’t make it on our list of the 30 Most Popular Stocks Among Hedge Funds. The Progressive Corporation (NYSE:PGR) was in 52 hedge fund portfolios at the end of the fourth quarter of 2021, compared to 47 funds in the previous quarter. The Progressive Corporation (NYSE:PGR) delivered a 2.61% return in the past 3 months.
In February 2022, we published an article that includes The Progressive Corporation (NYSE:PGR) in another article. You can find other investor letters from hedge funds and prominent investors on our hedge fund investor letters 2022 Q1 page.
Disclosure: None. This article is originally published at Insider Monkey.
