Here’s Why The Progressive Corporation (PGR) Detracted in Q3

Middle Coast Investing, an investment advisor firm, released its third-quarter 2025 investor letter. A copy of the letter can be downloaded here. The third quarter was favorable for Middle Coast Investing. Its collective portfolio outperformed the S&P 500 and is ahead of benchmarks year to date. In Q3 2025, the US Portfolios returned 9.6% compared to 7.8% for the S&P 500. It’s Core U.S. portfolios returned 10% while the Russell 2000 returned 12%, the S&P 600 returned 8.7% and the Nasdaq generated 11.2% for the same period. Also, its European Portfolios appreciated by 5.5%. In addition, please check the fund’s top five holdings to know its best picks in 2025.

In its third-quarter 2025 investor letter, Middle Coast Investing 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 -1.02%, and its shares lost 0.85% of their value over the last 52 weeks. On October 3, 2025, The Progressive Corporation (NYSE:PGR) stock closed at $245.70 per share, with a market capitalization of $144.03 billion.

Middle Coast Investing stated the following regarding The Progressive Corporation (NYSE:PGR) in its third quarter 2025 investor letter:

“The Progressive Corporation (NYSE:PGR) is the least concerning of our performance detractors this quarter. It has been our second biggest loser two quarters in a row – reflective of how big a position it is – and is just above flat on the year. Analyst earnings estimates continue to rise.

That usually is a contradiction – earnings drive stock prices. But the medium-term concerns are reasonable. Progressive’s earnings are so high because it is posting very low combined ratios. That tends to be unsustainable because claims regress to closer to what Progressive priced, or Progressive lowers rates. If Progressive doesn’t lower rates, competitors come in. Indeed, Progressive’s policy in force growth rate in August slowed down to 8.5% on an annualized, month over month basis, and 13% year over year, compared to 18% at the beginning of the year.

At the same time, Progressive trades for less than 13x trailing earnings, is growing policies at an 8.5%-13% pace, and has done fine through cycles. We have an order slightly below the current price to fill out the position for portfolios where we are underweight, and I am not terribly worried about PGR over the years ahead.”

In another article, we covered The Progressive Corporation (NYSE:PGR) and shared the list of best and cheap stocks to buy. In addition, please check out our hedge fund investor letters Q3 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.