Tweedy, Browne Company LLC, an investment management firm, published its “Tweedy, Browne Global Value Fund” first quarter 2021 investor letter – a copy of which can be downloaded here. A return of 7.14% was recorded by the fund for the Q1 of 2021, below the MSCI EAFE Index that delivered a 7.63% return for the same period. You can view the fund’s top 5 holdings to have a peek at their top bets for 2021.
Tweedy Browne Global Value Fund, in their Q1 2021 investor letter, mentioned The Progressive Corporation (NYSE: PGR), and shared their insights on the company. The Progressive Corporation is a Mayfield, Ohio-based insurance company that currently has a $60.7 billion market capitalization. Since the beginning of the year, PGR delivered a 4.98% return, extending its 12-month gains to 38.53%. As of May 05, 2021, the stock closed at $103.80 per share.
Here is what Tweedy Browne Global Value Fund has to say about The Progressive Corporation in their Q1 2021 investor letter:
“One of our new buys in the Worldwide High Dividend Yield Value Fund during the quarter was Progressive Corporation, the third largest personal automobile insurance carrier in the U.S., with a market share of 13% as of December 31, 2020. While the Company has a successful history of expanding into new markets (like commercial auto insurance), personal auto insurance still dominates its profit and loss statement (“P&L”), representing 89% of Progressive’s pre-tax underwriting profit in 2020.
Progressive is a best-of-breed auto insurance carrier. The company has a long track record of innovation, market share gains, industry-leading profitability (lowest 10-year average combined ratio) and generating high returns (19% average operating ROE). Over the 16 years ended December 31, 2020, the value compound (defined as growth in book value per share plus cumulative dividends per share) was +13.3%. The Company seems to have clear competitive advantages: direct distribution (low expense ratio) and superior data analytics (low loss ratio).
At purchase, we paid between $85 and $87 per share, or roughly 15 times estimated 2021 operating earnings per share (excluding net after-tax gains/losses realized on securities), approximately 75% to 80% of our conservative estimates of intrinsic value. Moreover, Progressive has paid an above average dividend in the form of a regular quarterly dividend and a discretionary additional variable dividend paid annually. In 2019 and 2020, the total dividend declared per share was $2.65 and $4.90, respectively.”
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Our calculations show that The Progressive Corporation (NYSE: PGR) does not belong in our list of the 30 Most Popular Stocks Among Hedge Funds. As of the end of the fourth quarter of 2020, The Progressive Corporation was in 48 hedge fund portfolios, compared to 47 funds in the third quarter. PGR delivered a 17.77% return in the past 3 months.
The top 10 stocks among hedge funds returned 231.2% between 2015 and 2020, and outperformed the S&P 500 Index ETFs by more than 126 percentage points. We know it sounds unbelievable. You have been dismissing our articles about top hedge fund stocks mostly because you were fed biased information by other media outlets about hedge funds’ poor performance. You could have doubled the size of your nest egg by investing in the top hedge fund stocks instead of dumb S&P 500 ETFs. Here you can watch our video about the top 5 hedge fund stocks right now. All of these stocks had positive returns in 2020.
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Disclosure: None. This article is originally published at Insider Monkey.
