Is PROG Holdings (PRG) Still an Attractive Company to Invest In?

Diamond Hill Capital, an investment management firm, published its “Diamond Hill Small Cap Fund” first quarter 2021 investor letter – a copy of which can be downloaded here. The portfolio outpaced the Russell 2000® Index in the quarter with positive absolute results across all sectors. You can view the fund’s top 5 holdings to have a peek at their top bets for 2021.

Diamond Hill Capital, in its Q1 2021 investor letter, mentioned PROG Holdings, Inc. (NYSE: PRG), and shared their insights on the company. PROG Holdings, Inc. is an Atlanta, Georgia-based furniture stores company that currently has a $3.5 billion market capitalization. Since the beginning of the year, PRG delivered a -1.76% return, while its 12-month gains are up by 83.76%. As of May 21, 2021, the stock closed at $52.92 per share.

Here is what Diamond Hill Capital has to say about PROG Holdings, Inc. in its Q1 2021 investor letter:

“Bottom contributors included PROG Holdings, the largest virtual lease-to-own provider in the U.S. Weaker traffic at PROG’s brick-and-mortar partners and supply chain issues impacted availability of furniture and appliances to lease. We anticipate these issues should improve later in 2021. Additionally, an inquiry into lease-to-own providers by California’s relatively new Department of Financial Protection and Innovation may lead to an increased regulatory burden. However, management is executing well on its integration of e-commerce capabilities with existing partners and is looking to expand with third-party platforms. Further, the business model is attractive as it is relatively asset-light and generates strong and consistent free cash flow.”

Our calculations show that PROG Holdings, Inc. (NYSE: PRG) does not belong in our list of the 30 Most Popular Stocks Among Hedge Funds. As of the end of the first quarter of 2021, PROG Holdings, Inc. was in 34 hedge fund portfolios, compared to 38 funds in the fourth quarter of 2020. PRG delivered a 9.09% return in the past 3 months.

The top 10 stocks among hedge funds returned 231.2% between 2015 and 2020, and outperformed the S&P 500 Index ETFs by more than 126 percentage points. We know it sounds unbelievable. You have been dismissing our articles about top hedge fund stocks mostly because you were fed biased information by other media outlets about hedge funds’ poor performance. You could have doubled the size of your nest egg by investing in the top hedge fund stocks instead of dumb S&P 500 ETFs. Here you can watch our video about the top 5 hedge fund stocks right now. All of these stocks had positive returns in 2020.

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Disclosure: None. This article is originally published at Insider Monkey.