Wedgewood Partners, an investment management firm, published its second-quarter 2022 investor letter – a copy of which can be downloaded here. For the first half of 2022, a portfolio net return of -17.2% was recorded by the fund, underperforming the S&P 500 Index which delivered a -16.1% return for the same period. Go over the fund’s top 5 positions to have a glimpse of its finest picks for 2022.
In its Q2 2022 investor letter, Wedgewood Partners mentioned The Progressive Corporation (NYSE:PGR) and explained its insights for the company. Founded in 1937, The Progressive Corporation (NYSE:PGR) is a Mayfield Village, Ohio-based insurance company with a $65.8 billion market capitalization. The Progressive Corporation (NYSE:PGR) delivered a 9.68% return since the beginning of the year, while its 12-month returns are up by 17.43%. The stock closed at $112.59 per share on July 26, 2022.
Here is what Wedgewood Partners has to say about The Progressive Corporation (NYSE:PGR) in its Q2 2022 investor letter:
“Progressive Corp had a positive contribution to performance during the quarter. Net Premiums Written (NPW) grew +12% as the Company grew both policies in force and took rate to offset higher loss cost trends that are being driven by inflation. For example, we estimate accident severity for personal auto are up +35% since the beginning of the pandemic. However, this is partially offset by a 20% decline in frequency, due to people driving fewer miles. Progressive is making up for this net rise in cost by raising policy rates in the mid-teens percentage range. Progressive has been relatively early to take rate compared to industry peers, so the Company should be able to aggressively compete for share as competitors play catchup.”
Our calculations show that The Progressive Corporation (NYSE:PGR) fell short and didn’t make it on our list of the 30 Most Popular Stocks Among Hedge Funds. The Progressive Corporation (NYSE:PGR) was in 52 hedge fund portfolios at the end of the second quarter of 2022, compared to 52 funds in the previous quarter. The Progressive Corporation (NYSE:PGR) delivered a 3.86% return in the past 3 months.
In July 2022, we also shared another hedge fund’s views on The Progressive Corporation (NYSE:PGR) in another article. You can find other investor letters from hedge funds and prominent investors on our hedge fund investor letters 2022 Q1 page.
Disclosure: None. This article is originally published at Insider Monkey.