The Progressive Corporation (PGR) Surged in Q1. Here's Why

Baron Funds, an investment management company, released its “Baron FinTech Fund” first quarter 2025 investor letter. A copy of the letter can be downloaded here. U.S. equities closed 5% lower in Q1, following a sharp decline in March. Markets started well with the S&P 500 Index reaching new highs. However, concerns about tariffs, inflation, and softer economic growth, along with concerns about AI secular growth, contributed to risk-off conditions. In the first quarter, the fund fell 1.31% (Institutional Shares) compared to a -7.52% return for the FactSet Global FinTech Index (Benchmark) and a -4.27% decline for the S&P 500 index. Since its inception, the fund has appreciated at an annualized rate of 11.27%, compared to a 2.22% return for the Benchmark. In addition, please check the fund’s top five holdings to know its best picks in 2025.

In its first-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 4.64%, and its shares gained 35.99% of their value over the last 52 weeks. On May 23, 2025, The Progressive Corporation (NYSE:PGR) stock closed at $277.30 per share with a market capitalization of $162.56 billion.

Baron FinTech Fund stated the following regarding The Progressive Corporation (NYSE:PGR) in its Q1 2025 investor letter:

"The Progressive Corporation (NYSE:PGR) is a leading auto insurance company. Shares increased as the company continued to perform well, growing its auto policy count more than 20% with underwriting margins well above its 4% target. We don’t think these growth rates and margins are sustainable due to the inevitable return of pricing pressure in a competitive insurance market. However, Progressive continues to gain market share and has now surpassed Geico to become the second largest auto insurer in the U.S. behind State Farm. Shares also benefited from the relative defensiveness of insurance stocks in a risk-off market. We remain shareholders because we view Progressive as a best-in-class insurer that should continue gaining share in a large market."

The Progressive Corporation (NYSE:PGR) is in 30th position on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 91 hedge fund portfolios held The Progressive Corporation (NYSE:PGR) at the end of the first quarter compared to 100 in the third quarter. While we acknowledge the potential of The Progressive Corporation (NYSE:PGR) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

In another article, we covered The Progressive Corporation (NYSE:PGR) and shared The London Company Large Cap Strategy's views on the company. In addition, please check out our hedge fund investor letters Q1 2025 page for more investor letters from hedge funds and other leading investors.

READ NEXT: Michael Burry Is Selling These Stocks and A New Dawn Is Coming to US Stocks.

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