Giverny Capital Asset Management, LLC, an investment management company, recently published its second-quarter 2025 investor letter. A copy of the letter can be downloaded here. During the first half of the year, the market was volatile. The S&P 500 ended June 30 up 6.20%. The portfolio lagged behind the market initially but gained 5.41% over the six months. In the quarter ended June, the portfolio returned 9.11% compared to the S&P 500’s 10.94% return. Additionally, you can review the fund’s top 5 holdings to see its best picks for 2025.
In its second-quarter 2025 investor letter, Giverny Capital Asset Management highlighted stocks such as The Progressive Corporation (NYSE:PGR). The Progressive Corporation (NYSE:PGR) is a US-based insurance company. The one-month return of The Progressive Corporation (NYSE:PGR) was -2.98%, and its shares gained 12.53% of their value over the last 52 weeks. On August 5, 2025, The Progressive Corporation (NYSE:PGR) stock closed at $242.94 per share, with a market capitalization of $142.414 billion.
Giverny Capital Asset Management stated the following regarding The Progressive Corporation (NYSE:PGR) in its second quarter 2025 investor letter:
“We trimmed our large holding in The Progressive Corporation (NYSE:PGR) during the quarter at roughly $282. We also sold some shares in the first quarter, such that through June 30th we sold 29% of the holding in the model portfolio. Clients who have been with us for any length of time will have significant capital gains, as Progressive stock doubled in the past two years.
Selling winners because they’ve exceeded your price target generally does not work. The best companies tend to outperform expectations over time and when you own a business that does this, the smarter strategy is to rethink your expectations rather than take profits. We still own a substantial weight in Progressive, and I continue to believe it is among the best managed companies in our portfolio. But auto insurance has a cycle, and right now we appear to be at the top of the cycle: rates are at historically high levels, industry profitability is rising rapidly (which could catch the eyes of regulators and create downward future pricing pressure), and rivals are ramping up their advertising to try to grow faster. Meanwhile, Progressive is earning record earnings and trading at high multiples of those earnings, while also growing far faster than the industry.
Barring a major surprise over the next six months, Progressive will double its revenue over the five years ending December 2025 and nearly double its net income. Competitor Allstate, by comparison, will grow revenue about half as fast as Progressive over the five year period, and likely will earn less money in 2025 than it did five years ago. Progressive has managed through this strange post-pandemic period far better than its leading rivals and is well-positioned for the future.
I suspect, however, that we are entering a period in which rate competition will lead to weaker profitability for all players. I feel Progressive’s future return is likely to be lower than the past five years. So, I’m comfortable holding it at a smaller size. As car insurance has cyclical characteristics, I remain open to increasing the position in the future.”
A team of accountants in a boardroom, discussing strategic moves of an insurance company.
The Progressive Corporation (NYSE:PGR) is in 30th position on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 91 hedge fund portfolios held The Progressive Corporation (NYSE:PGR) at the end of the first quarter, which was 100 in the previous quarter. While we acknowledge the risk and potential of The Progressive Corporation (NYSE:PGR) as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than THE PROGRESSIVE CORPORATION (NYSE:PGR) and that has 10,000% upside potential, check out our report about this cheapest AI stock.
In another article, we covered The Progressive Corporation (NYSE:PGR) and shared Madison Large Cap Fund’s views on the company. In addition, please check out our hedge fund investor letters Q2 2025 page for more investor letters from hedge funds and other leading investors.
READ NEXT: The Best and Worst Dow Stocks for the Next 12 Months and 10 Unstoppable Stocks That Could Double Your Money.
Disclosure: None. This article is originally published at Insider Monkey.
