In this article we will take a look at whether hedge funds think The Progressive Corporation (NYSE:PGR) is a good investment right now. We check hedge fund and billionaire investor sentiment before delving into hours of research. Hedge funds spend millions of dollars on Ivy League graduates, unconventional data sources, expert networks, and get tips from investment bankers and industry insiders. Sure they sometimes fail miserably, but their consensus stock picks historically outperformed the market after adjusting for known risk factors.
Is The Progressive Corporation (PGR) stock a buy or sell? Hedge funds were becoming more confident. The number of bullish hedge fund positions rose by 1 recently. The Progressive Corporation (NYSE:PGR) was in 48 hedge funds’ portfolios at the end of December. The all time high for this statistic is 53. Our calculations also showed that PGR isn’t among the 30 most popular stocks among hedge funds (click for Q4 rankings). There were 47 hedge funds in our database with PGR holdings at the end of September.
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that a select group of hedge fund holdings outperformed the S&P 500 ETFs by 124 percentage points since March 2017 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that’ll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 13% through November 17th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Glenn Greenberg of Brave Warrior Capital
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, lithium mining is one of the fastest growing industries right now, so we are checking out stock pitches like this emerging lithium stock. We go through lists like the 10 best hydrogen fuel cell stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage (or at the end of this article). Keeping this in mind we’re going to take a peek at the new hedge fund action regarding The Progressive Corporation (NYSE:PGR).
Do Hedge Funds Think PGR Is A Good Stock To Buy Now?
At fourth quarter’s end, a total of 48 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 2% from one quarter earlier. On the other hand, there were a total of 48 hedge funds with a bullish position in PGR a year ago. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, GQG Partners was the largest shareholder of The Progressive Corporation (NYSE:PGR), with a stake worth $414.9 million reported as of the end of December. Trailing GQG Partners was Egerton Capital Limited, which amassed a stake valued at $298.2 million. Brave Warrior Capital, AQR Capital Management, and Abrams Bison Investments were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Abrams Bison Investments allocated the biggest weight to The Progressive Corporation (NYSE:PGR), around 10.28% of its 13F portfolio. 12th Street Asset Management is also relatively very bullish on the stock, dishing out 6.78 percent of its 13F equity portfolio to PGR.
With a general bullishness amongst the heavyweights, specific money managers have been driving this bullishness. Viking Global, managed by Andreas Halvorsen, initiated the biggest position in The Progressive Corporation (NYSE:PGR). Viking Global had $88.5 million invested in the company at the end of the quarter. Dmitry Balyasny’s Balyasny Asset Management also made a $4.3 million investment in the stock during the quarter. The other funds with brand new PGR positions are Nicholas Bagnall’s Te Ahumairangi Investment Management, Qing Li’s Sciencast Management, and Mitch Rubin’s RiverPark Advisors.
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as The Progressive Corporation (NYSE:PGR) but similarly valued. We will take a look at Ferrari N.V. (NYSE:RACE), ABB Ltd (NYSE:ABB), Workday Inc (NASDAQ:WDAY), Takeda Pharmaceutical Company Limited (NYSE:TAK), Edwards Lifesciences Corporation (NYSE:EW), PetroChina Company Limited (NYSE:PTR), and Itau Unibanco Holding SA (NYSE:ITUB). All of these stocks’ market caps resemble PGR’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| RACE | 29 | 1527088 | -2 |
| ABB | 8 | 467566 | -5 |
| WDAY | 80 | 4443166 | 6 |
| TAK | 18 | 835529 | -1 |
| EW | 38 | 1243466 | -8 |
| PTR | 5 | 61529 | -1 |
| ITUB | 19 | 451744 | 3 |
| Average | 28.1 | 1290013 | -1.1 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 28.1 hedge funds with bullish positions and the average amount invested in these stocks was $1290 million. That figure was $1745 million in PGR’s case. Workday Inc (NASDAQ:WDAY) is the most popular stock in this table. On the other hand PetroChina Company Limited (NYSE:PTR) is the least popular one with only 5 bullish hedge fund positions. The Progressive Corporation (NYSE:PGR) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for PGR is 61.8. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 30 most popular stocks among hedge funds returned 81.2% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 26 percentage points. These stocks gained 5.3% in 2021 through March 19th and beat the market again by 0.8 percentage points. Unfortunately PGR wasn’t nearly as popular as these 30 stocks and hedge funds that were betting on PGR were disappointed as the stock returned -3.5% since the end of December (through 3/19) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 30 most popular stocks among hedge funds as many of these stocks already outperformed the market since 2019.
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Disclosure: None. This article was originally published at Insider Monkey.
