What Makes The Progressive Corporation (PGR) a Good Investment?

Baron Funds, an investment management company, released its “Baron FinTech Fund” second quarter 2025 investor letter. A copy of the letter can be downloaded here. In the second quarter, the fund returned 9.26% (Institutional Shares) compared to a 13.82% return for the FactSet Global FinTech Index (Benchmark). Since its inception, the fund has appreciated at an annualized rate of 12.53%, compared to a 4.55% return for the Benchmark. The fund managed gains in a period of heightened volatility. In addition, please check the fund’s top five holdings to know its best picks in 2025.

In its second-quarter 2025 investor letter, Baron FinTech Fund 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 1.08%, and its shares lost 0.60% of their value over the last 52 weeks. On August 25, 2025, The Progressive Corporation (NYSE:PGR) stock closed at $244.09 per share, with a market capitalization of $143.134 billion.

Baron FinTech Fund stated the following regarding The Progressive Corporation (NYSE:PGR) in its second quarter 2025 investor letter:

"Shares of leading auto insurance company The Progressive Corporation (NYSE:PGR) fell during the quarter. Progressive is experiencing a “Goldilocks” moment, with strong performance across key metrics. In the June quarter, policies in force grew 15%, earned premiums grew 18%, and the underwriting margin of 14% far exceeded the company’s 4% long-term target. However, competition is heating up as peers achieve rate adequacy and advertise more aggressively. Investors have become increasingly concerned that Progressive’s premium growth and margins will moderate, weighing on sentiment and contributing to the stock’s underperformance. While the backdrop for earnings growth may become more challenging, we remain shareholders given Progressive’s strong fundamentals and best-in-class execution. We continue to view Progressive as a superior operator that’s well positioned to gain market share while maintaining a disciplined underwriting approach."

The Progressive Corporation (NYSE:PGR) is in 30th position on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 99 hedge fund portfolios held The Progressive Corporation (NYSE:PGR) at the end of the second quarter, which was 91 in the previous quarter. While we acknowledge the potential of The Progressive Corporation (NYSE:PGR) as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

In another article, we covered The Progressive Corporation (NYSE:PGR) and shared the list of most undervalued long-term stocks to buy according to hedge funds. Giverny Capital Asset Management trimmed its position in The Progressive Corporation (NYSE:PGR) during Q2 2025. In addition, please check out our hedge fund investor letters Q2 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.