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The Progressive Corporation (PGR): Hedge Funds Are Bullish and Insiders Are Undecided, What Should You Do?

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Is The Progressive Corporation (NYSE:PGR) a good investment?

To many investors, hedge funds are viewed as useless, old investment tools of a forgotten age. Although there are In excess of 8,000 hedge funds trading today, Insider Monkey focuses on the masters of this group, close to 525 funds. It is assumed that this group has its hands on the lion’s share of the smart money’s total capital, and by monitoring their highest performing picks, we’ve brought to light a few investment strategies that have historically outpaced the broader indices. Our small-cap hedge fund strategy outstripped the S&P 500 index by 18 percentage points per year 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 trumped the S&P 500 index by 33 percentage points in 11 months (explore the details and some picks here).

Just as necessary, positive insider trading activity is another way to analyze the world of equities. As the old adage goes: there are lots of incentives for an upper level exec to cut shares of his or her company, but just one, very simple reason why they would buy. Plenty of empirical studies have demonstrated the impressive potential of this strategy if piggybackers know where to look (learn more here).

Now that that’s out of the way, let’s analyze the latest info surrounding The Progressive Corporation (NYSE:PGR).

The Progressive Corporation (NYSE:PGR)

Hedge fund activity in The Progressive Corporation (NYSE:PGR)

Heading into Q3, a total of 19 of the hedge funds we track held long positions in this stock, a change of 19% from the first quarter. With hedgies’ sentiment swirling, there exists a select group of noteworthy hedge fund managers who were increasing their holdings significantly.

Out of the hedge funds we follow, Diamond Hill Capital, managed by Ric Dillon, holds the most valuable position in The Progressive Corporation (NYSE:PGR). Diamond Hill Capital has a $123.8 million position in the stock, comprising 1.3% of its 13F portfolio. The second largest stake is held by Carlson Capital, managed by Clint Carlson, which held a $31.7 million position; the fund has 0.4% of its 13F portfolio invested in the stock. Some other hedge funds that hold long positions include David Harding’s Winton Capital Management, Phill Gross and Robert Atchinson’s Adage Capital Management and Claes Fornell’s CSat Investment Advisory.

As industrywide interest increased, certain bigger names have been driving this bullishness. Diamond Hill Capital, managed by Ric Dillon, created the largest position in The Progressive Corporation (NYSE:PGR). Diamond Hill Capital had 123.8 million invested in the company at the end of the quarter. Clint Carlson’s Carlson Capital also initiated a $31.7 million position during the quarter. The other funds with new positions in the stock are David Harding’s Winton Capital Management, Phill Gross and Robert Atchinson’s Adage Capital Management, and Claes Fornell’s CSat Investment Advisory.

How are insiders trading The Progressive Corporation (NYSE:PGR)?

Insider buying made by high-level executives is particularly usable when the company we’re looking at has experienced transactions within the past 180 days. Over the last 180-day time period, The Progressive Corporation (NYSE:PGR) has experienced zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).

We’ll also take a look at the relationship between both of these indicators 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 belong to the property & casualty insurance industry and their market caps are closest to PGR’s market cap.

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