Vulcan Value Partners is Full of Hope in PROG Holdings (PRG)

Vulcan Value Partners, an investment management firm, published its “Large Cap, Small Cap, Focus Composite, Focus Plus Composite, and All Cap” fourth quarter 2020 investor letter – a copy of which can be downloaded here. Vulcan’s Large Cap, Small Cap and All Cap strategies beat both their primary and secondary benchmarks, while Focus and Focus Plus trailed their primary benchmarks but beat their secondary benchmarks. You can view the fund’s top 5 holdings to have a peek at their top bets for 2021.

Vulcan Value Partners, in their Q4 2020 investor letter, mentioned PROG Holdings, Inc. (NYSE: PRG) and emphasized their views on the company. PROG Holdings, Inc. is a Atlanta, Georgia-based  lease-purchase solutions provider that currently has a $2.99 billion market capitalization. Since the beginning of the year, PRG delivered a -18.17% return, while its 12-month gains are decently up by 128.31%. As of March 30, 2021, the stock closed at $44.08 per share.

Here is what Vulcan Value Partners has to say about PROG Holdings, Inc. in their Q4 2020 investor letter:

“PROG Holdings Inc., composed of Progressive Leasing and Vive Financial, was formerly a part of Aarons Holdings Company Inc. Progressive, the company’s primary asset, partners with leading retailers such as Best Buy, Lowe’s, Overstock, and Ashley Furniture HomeStore to provide lease-purchase solutions to retail customers. Progressive’s lending options provide consumers the ability to buy products they otherwise could not purchase and offer the retailer the ability to make sales it otherwise would not have made. Its large total addressable market (TAM), unique product offering, high returns on capital, and ability to grow at high rates while still generating free cash flow make it an attractive company. Progressive is well- positioned to take advantage of the recent exponential growth in ecommerce resulting from COVID-19.”

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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 fourth quarter of 2020, PROG Holdings, Inc. was in 38 hedge fund portfolios. PRG delivered a -19.22% return in the past 3 months.