Before we spend many hours researching a company, we’d like to analyze what hedge funds and billionaire investors think of the stock first. We would like to do so because the elite investors’ consensus returns have been exceptional. The top 30 mid-cap stocks among the best performing hedge funds in our database yielded an average return of 18% during the last 12 months, outperforming the S&P 500 Index funds by double digits. Although the elite funds occasionally have their duds, such as SunEdison and Valeant, the hedge fund picks seem to work on average. In the following paragraphs, we find out what the billionaire investors and hedge funds think of Progressive Corp (NYSE:PGR).
Progressive Corp (NYSE:PGR) registered a a slight decrease in enthusiasm from smart money of late. At the end of September, 29 funds from our database held shares of the company, compared to 30 funds a quarter earlier. However, the level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives, because a stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as Franklin Resources, Inc. (NYSE:BEN), Brown-Forman Corporation (NYSE:BF), and Canadian Pacific Railway Limited (USA) (NYSE:CP) to gather more data points.
Follow Progressive Corp (NYSE:PGR)
Follow Progressive Corp (NYSE:PGR)
At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.
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Now, let’s take a glance at the recent action surrounding Progressive Corp (NYSE:PGR).
How have hedgies been trading Progressive Corp (NYSE:PGR)?
A total of 29 funds tracked by Insider Monkey were long Progressive Corp heading into the fourth quarter, down by 3% from one quarter earlier. With hedge funds’ capital changing hands, there exists a few noteworthy hedge fund managers who were increasing their holdings substantially (or already accumulated large positions).
According to Insider Monkey’s hedge fund database, Citadel Investment Group, managed by Ken Griffin, holds the biggest position in Progressive Corp (NYSE:PGR). Citadel Investment Group has a $192.9 million position in the stock, comprising 0.2% of its 13F portfolio. Coming in second is Cliff Asness’ AQR Capital Management, with a $144.6 million position; 0.2% of its 13F portfolio is allocated to the stock. Remaining hedge funds and institutional investors with similar optimism contain Ric Dillon’s Diamond Hill Capital, Jim Simons’ Renaissance Technologies and John W. Rogers’s Ariel Investments.
Seeing as Progressive Corp (NYSE:PGR) has faced bearish sentiment from the aggregate hedge fund industry, we can see that there was a specific group of funds that decided to sell off their entire stakes in the third quarter. Interestingly, Joe DiMenna’s ZWEIG DIMENNA PARTNERS dropped the largest investment of the “upper crust” of funds watched by Insider Monkey, comprising an estimated $13.7 million in stock, and Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital was right behind this move, as the fund cut about $12.7 million worth of shares.
Let’s now take a look at hedge fund activity in other stocks similar to Progressive Corp (NYSE:PGR). We will take a look at Franklin Resources, Inc. (NYSE:BEN), Brown-Forman Corporation (NYSE:BF), Canadian Pacific Railway Limited (USA) (NYSE:CP), and Hormel Foods Corporation (NYSE:HRL). This group of stocks’ market valuations match PGR’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| BEN | 32 | 1957076 | 0 |
| BF | 21 | 614747 | -3 |
| CP | 32 | 2233116 | 1 |
| HRL | 27 | 706735 | -2 |
As you can see these stocks had an average of 28 funds from our database with bullish positions and the average amount invested in these stocks was $1.38 billion. That figure was $914 million in PGR’s case. Franklin Resources, Inc. (NYSE:BEN) is the most popular stock in this table. On the other hand Brown-Forman Corporation (NYSE:BF) is the least popular one with only 21 bullish hedge fund positions. Progressive Corp (NYSE:PGR) is not the most popular stock in this group, but hedge fund interest is still above average. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard Franklin Resources, Inc. (NYSE:BEN) might be a better candidate to consider a long position.
