PGR is now encountering more direct competition in its selected personal lines business with more aggressive marketing by AIG, as well as the continuing penetration by GEICO. Pricing competition appears to be increasing in several of the larger markets. As PGR continues to buy back its shares, and revenues may not expand to cover that, future investment income will probably be adversly affected , though with some "lag."
Schwab rates this a "B." Value Line is closer with 4 for timeliness.
On the technical side, it appears that this stock is in an accelerating distribution on increasing OBV (on balance volume). Additionally, it is correcting from having been overbought after a long oversold period. These share will probably have an increased "beta" (volatility) well into the 3d qtr, and one might be tempted to suggest the use of puts. However, care should be taken to watch the outstanding "open interest" volume when a company has a large remaining repurchase program. Regretably, the charting of this (from Stockcharts.com) may not be available for uploading from my subscription. But, viewers can go there for a free sample.The shares are about to cross below the 50 day moving average. While Chalkin cash flow is still+, it is getting thinner.
$23.82 (01/08/07)
