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Hedge Funds Have Never Been This Bullish On The Progressive Corporation (PGR)

Nina Todic

Is The Progressive Corporation (NYSE:PGR) a good place to invest some of your money right now? We can gain invaluable insight to help us answer that question by studying the investment trends of top investors, who employ world-class Ivy League graduates, who are given immense resources and industry contacts to put their financial expertise to work. The top picks of these firms have historically outperformed the market when we account for known risk factors, making them very valuable investment ideas.

Is The Progressive Corporation (NYSE:PGR) worth your attention right now? Prominent investors are becoming more confident. The number of long hedge fund bets improved by 6 lately. Our calculations also showed that PGR isn't among the 30 most popular stocks among hedge funds (see the video at the end of this article). PGR was in 50 hedge funds' portfolios at the end of June. There were 44 hedge funds in our database with PGR positions at the end of the previous quarter.

In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey's flagship best performing hedge funds strategy returned 25.8% year to date (through May 30th) and outperformed the market even though it draws its stock picks among small-cap stocks. This strategy also outperformed the market by 40 percentage points since its inception (see the details here). That's why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.

[caption id="attachment_30621" align="aligncenter" width="487"] Cliff Asness of AQR Capital Management[/caption]

AQR CAPITAL MANAGEMENT

Unlike some fund managers who are betting on Dow reaching 40000 in a year, our long-short investment strategy doesn't rely on bull markets to deliver double digit returns. We only rely on hedge fund buy/sell signals. We're going to go over the fresh hedge fund action regarding The Progressive Corporation (NYSE:PGR).

What does smart money think about The Progressive Corporation (NYSE:PGR)?

At the end of the second quarter, a total of 50 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 14% from the previous quarter. The graph below displays the number of hedge funds with bullish position in PGR over the last 16 quarters. So, let's check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

No of Hedge Funds with PGR Positions

More specifically, Renaissance Technologies was the largest shareholder of The Progressive Corporation (NYSE:PGR), with a stake worth $554.9 million reported as of the end of March. Trailing Renaissance Technologies was AQR Capital Management, which amassed a stake valued at $247.4 million. Two Sigma Advisors, Citadel Investment Group, and D E Shaw were also very fond of the stock, giving the stock large weights in their portfolios.

As industrywide interest jumped, specific money managers have been driving this bullishness. Partner Fund Management, managed by Christopher James, assembled the most outsized position in The Progressive Corporation (NYSE:PGR). Partner Fund Management had $52.2 million invested in the company at the end of the quarter. Israel Englander's Millennium Management also initiated a $11.9 million position during the quarter. The other funds with brand new PGR positions are Robert B. Gillam's McKinley Capital Management, Gregg Moskowitz's Interval Partners, and Benjamin A. Smith's Laurion Capital Management.

Let's go over hedge fund activity in other stocks similar to The Progressive Corporation (NYSE:PGR). These stocks are Brookfield Asset Management Inc. (NYSE:BAM), Raytheon Company (NYSE:RTN), Las Vegas Sands Corp. (NYSE:LVS), and Metlife Inc (NYSE:MET). This group of stocks' market caps are closest to PGR's market cap.

[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position BAM,22,806950,-4 RTN,39,1609376,-1 LVS,39,1882579,2 MET,26,1498576,-5 Average,31.5,1449370,-2 [/table]

View table here if you experience formatting issues.

As you can see these stocks had an average of 31.5 hedge funds with bullish positions and the average amount invested in these stocks was $1449 million. That figure was $1803 million in PGR's case. Raytheon Company (NYSE:RTN) is the most popular stock in this table. On the other hand Brookfield Asset Management Inc. (NYSE:BAM) is the least popular one with only 22 bullish hedge fund positions. Compared to these stocks The Progressive Corporation (NYSE:PGR) is more popular among hedge funds. Our calculations showed that top 20 most popular stocks among hedge funds returned 24.4% in 2019 through September 30th and outperformed the S&P 500 ETF (SPY) by 4 percentage points. Unfortunately PGR wasn't nearly as popular as these 20 stocks and hedge funds that were betting on PGR were disappointed as the stock returned -3.2% during the third quarter and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as many of these stocks already outperformed the market in Q3. Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.

5 Most Popular Stocks Among Hedge Funds

Disclosure: None. This article was originally published at Insider Monkey.

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