The Progressive Corporation (NYSE:PGR) has seen a decrease in activity from the world’s largest hedge funds of late.
According to most investors, hedge funds are perceived as underperforming, old investment tools of years past. While there are greater than 8000 funds with their doors open at present, we at Insider Monkey choose to focus on the bigwigs of this group, close to 450 funds. It is estimated that this group oversees the lion’s share of all hedge funds’ total capital, and by tracking their highest performing investments, we have come up with a number of investment strategies that have historically outpaced the market. Our small-cap hedge fund strategy beat the S&P 500 index by 18 percentage points annually for a decade in our back tests, and since we’ve began to sharing our picks with our subscribers at the end of August 2012, we have topped the S&P 500 index by 23.3 percentage points in 8 months (see all of our picks from August).
Just as integral, optimistic insider trading activity is another way to parse down the investments you’re interested in. As the old adage goes: there are a number of stimuli for a corporate insider to sell shares of his or her company, but just one, very obvious reason why they would initiate a purchase. Plenty of academic studies have demonstrated the useful potential of this method if you know what to do (learn more here).
With these “truths” under our belt, let’s take a look at the recent action surrounding The Progressive Corporation (NYSE:PGR).
How have hedgies been trading The Progressive Corporation (NYSE:PGR)?
In preparation for this quarter, a total of 16 of the hedge funds we track were long in this stock, a change of -16% from the previous quarter. With hedge funds’ positions undergoing their usual ebb and flow, there exists a few key hedge fund managers who were boosting their holdings substantially.
When looking at the hedgies we track, Diamond Hill Capital, managed by Ric Dillon, holds the largest position in The Progressive Corporation (NYSE:PGR). Diamond Hill Capital has a $137.5 million position in the stock, comprising 1.4% of its 13F portfolio. On Diamond Hill Capital’s heels is Carlson Capital, managed by Clint Carlson, which held a $39.4 million position; the fund has 0.5% of its 13F portfolio invested in the stock. Other hedgies that are bullish include Claes Fornell’s CSat Investment Advisory, Ken Fisher’s Fisher Asset Management and Brian Ashford-Russell and Tim Woolley’s Polar Capital.
Since The Progressive Corporation (NYSE:PGR) has witnessed declining sentiment from the smart money, we can see that there was a specific group of money managers that slashed their full holdings in Q1. Intriguingly, Matthew Tewksbury’s Stevens Capital Management dropped the biggest position of all the hedgies we track, totaling close to $14 million in stock., and Matthew Hulsizer of PEAK6 Capital Management was right behind this move, as the fund dumped about $2.7 million worth. These transactions are interesting, as total hedge fund interest was cut by 3 funds in Q1.
What have insiders been doing with The Progressive Corporation (NYSE:PGR)?
Insider buying is most useful when the company in question has seen transactions within the past 180 days. Over the last half-year time frame, The Progressive Corporation (NYSE:PGR) has seen zero unique insiders purchasing, and 4 insider sales (see the details of insider trades here).
Let’s also take a look at hedge fund and insider activity in other stocks similar to The Progressive Corporation (NYSE:PGR). These stocks are XL Group plc (NYSE:XL), The Allstate Corporation (NYSE:ALL), The Chubb Corporation (NYSE:CB), Hartford Financial Services Group Inc (NYSE:HIG), and Loews Corporation (NYSE:L). This group of stocks are in the property & casualty insurance industry and their market caps resemble PGR’s market cap.