Declines From Progressive Corporation (PGR) Drive Down Insurance Industry

Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.

Progressive Corporation ( PGR) pushed the Insurance industry lower today making it today's featured Insurance laggard. The industry as a whole closed the day up 1.1%. By the end of trading, Progressive Corporation fell 34 cents (-1.3%) to $25.42 on average volume. Throughout the day, 5.6 million shares of Progressive Corporation exchanged hands as compared to its average daily volume of four million shares. The stock ranged in price between $24.87-$25.66 after having opened the day at $25.60 as compared to the previous trading day's close of $25.76. Other companies within the Insurance industry that declined today were: Life Partners Holdings ( LPHI), down 4.7%, CoreLogic ( CLGX), down 3.8%, and Crawford & Company ( CRD.A), down 3.1%.
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The Progressive Corporation, through its subsidiaries, provides personal and commercial automobile insurance, and other specialty property-casualty insurance products and related services primarily in the United States. Progressive Corporation has a market cap of $15.46 billion and is part of the financial sector. The company has a P/E ratio of 17.3, below the S&P 500 P/E ratio of 17.7. Shares are up 22.1% year to date as of the close of trading on Tuesday. Currently there are three analysts that rate Progressive Corporation a buy, six analysts rate it a sell, and nine rate it a hold.

TheStreet Ratings rates Progressive Corporation as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, attractive valuation levels, good cash flow from operations, increase in stock price during the past year and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company has had sub par growth in net income.

On the positive front, PICO Holdings ( PICO), up 4.7%, China Life Insurance ( LFC), up 4.1%, ING Groep N.V ( ING), up 4.1%, and Lincoln National Corp (Radnor ( LNC), up 3.8%, were all gainers within the insurance industry with Prudential Financial ( PRU) being today's featured insurance industry leader.

For investors not wanting singular stock exposure, ETFs may be of interest. Investors who are bullish on the insurance industry could consider KBW Insurance ETF ( KIE) while those bearish on the insurance industry could consider Proshares Short Financials ( SEF).

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