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Here’s Why The Progressive Corporation (PGR) Detracted in Q2

Artisan Partners, an investment management company, released its “Artisan Global Opportunities Fund” second quarter 2023 investor letter. A copy of the same can be downloaded here. In the second quarter, its Investor Class fund ARTRX returned 5.73%, Advisor Class fund APDRX posted a return of 5.78%, and Institutional Class fund APHRX returned 5.83%, compared to a return of 6.18% for the MSCI All Country World Index. In addition, please check the fund’s top five holdings to know its best picks in 2023.

Artisan Global Opportunities Fund highlighted stocks like The Progressive Corporation (NYSE:PGR) in the second quarter 2023 investor letter. Headquartered in Mayfield Village, Ohio, The Progressive Corporation (NYSE:PGR) is an insurance holding company. On September 19, 2023, The Progressive Corporation (NYSE:PGR) stock closed at $142.47 per share. One-month return of The Progressive Corporation (NYSE:PGR) was 9.26%, and its shares gained 17.39% of their value over the last 52 weeks. The Progressive Corporation (NYSE:PGR) has a market capitalization of $83.359 billion.

Artisan Global Opportunities Fund made the following comment about The Progressive Corporation (NYSE:PGR) in its Q2 2023 investor letter:

"Among our top detractors were The Progressive Corporation (NYSE:PGR), Neste and Aptiv. Progressive is a leading provider of property and casualty insurance in the US. We believe its data and operational advantages position it well to gain profitable market share in personal and commercial auto, and homeowners insurance. While we have been frustrated by the company’s recent financial results, we view current issues as mostly transitory. The first issue is a Florida legislative change to injury liability claims. Specifically, a repeal of “one-way” attorney fees, or insurance companies’ having to pay policyholders’ attorney fees when the insured wins a claim. Under the new law, each party will pay its own legal costs. We view this legislative change as a positive for Progressive longer term, but there has been a rush of new claims before the law goes into effect. The second issue is inflationary cost pressures rising faster than the company’s ability to raise prices. For example, costs for auto claims have been rising due to 1) parts and labor shortages, which lead to pricing pressures, and 2) corresponding longer car rentals. Raising prices to match these rising price pressures is difficult because they need to be approved by state insurance commissions. While we view these issues as transitory longer term, we trimmed the position while we wait to see how these issues play out."

The Progressive Corporation (NYSE:PGR) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 69 hedge fund portfolios held The Progressive Corporation (NYSE:PGR) at the end of second quarter which was 64 in the previous quarter.

We discussed The Progressive Corporation (NYSE:PGR) in another article and shared the list of best low risk high growth stocks to buy. In addition, please check out our hedge fund investor letters Q2 2023 page for more investor letters from hedge funds and other leading investors.

 

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

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