Please ensure Javascript is enabled for purposes of website accessibility

Why Progressive Stock Gained 12% in January

By Demitri Kalogeropoulos - Feb 10, 2020 at 9:53AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The insurance giant posted solid premium growth last month.

What happened

Progressive (PGR 0.39%) shareholders beat the market last month as their investment gained 16% compared to a roughly flat result for the S&P 500, according to data provided by S&P Global Market Intelligence.

The rally got shares closer to market-matching returns over the medium term, given that the insurance giant's stock underperformed the S&P 500 by 10 percentage points in 2019.

A person signing a document on a desk

Image source: Getty Images.

So what

January's jump was powered by the solid operating results that management issued in the final days of the month. Progressive saw a 12% spike in written premiums in the fiscal fourth quarter, after adjusting for timing shifts. December was a strong month, too, as Progressive's base of personal auto policy holders rose 11% to 14.9 million. 

Now what

Investors will get another mid-quarter sales update on Feb. 19, but the stock's rally will be tested more significantly when Progressive announces its full fourth-quarter sales and profit trends later in the month. That's when the company will reveal detail about its margins and returns on equity, in addition to updates on the newly launched home insurance platform.

Demitrios Kalogeropoulos has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

The Progressive Corporation Stock Quote
The Progressive Corporation
PGR
$122.49 (0.39%) $0.48

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
403%
 
S&P 500 Returns
128%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 08/16/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.