Progressive Corp (PGR) Dominates Bullish Returns in Ariel Investments’ Port

Ariel Investments, a minority-owned investment company that focuses in small and mid-capitalized US based stocks, published its third-quarter 2020 Investor Letter – a copy of which can be downloaded here. A positive return of 4.56% was recorded by the fund for the 3rd Quarter of 2020, ahead of its Russell 2500 Value benchmark that returned 3.54%. You can view the fund’s top 10 holdings to have a peek at their top bets for 2021.

Ariel Investments in their Q3 2020 Investor Letter said that they were able to distinguish a value in The Progressive Corporation (NYSE: PGR) and a top contributor for the hedge fund. Progressive Corporation is an insurance company that currently has a $54.661 billion market cap. For the past 3 months, PGR delivered a -3.24% return and settled at $93.35 per share at the closing of January 14th.

Here is what Ariel Investments has to say about The Progressive Corporation in their Investor Letter:

“Personal auto insurer, Progressive Corporation (NYSE: PGR) was the top contributor to results over the trailing twelve-month period. The company has been delivering robust earnings results highlighted by premium growth and margin expansion. PGR is experiencing an improvement in auto losses, as people are driving less due to the persistence of the pandemic. Looking ahead, we expect the top line will continue to benefit from PGR’s digital dominance for auto insurance in the direct channel, as well as from the rollout of several new niche commercial products. At current levels, PGR is trading at a 5% discount to our estimate of private market value.”

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Last December 2020, we published an article telling that The Progressive Corporation (NYSE: PGR) was in 47 hedge funds’ portfolio, almost making it to its all time high statistics of 53. The Progressive Corporation proved its worth by delivering a 22.63% return in the past 12 months.