3. Constellation (NASDAQ:CEG)
Number of Hedge Fund Holders: 71
Market Capitalization as of September 2: $61.5 Billion
Constellation (NASDAQ:CEG) supplies natural gas, and energy products and services. The company serves residential, commercial, and industrial clients across North America. Constellation Energy (NASDAQ:CEG) is a major player in nuclear power, and is committed to deliver clean and affordable energy. Constellation Energy (NASDAQ:CEG) contributes 10% of the total carbon-free energy consumed in the United States.
In Q1 2024, the company’s net income per share increased to $2.78 from $0.29 compared the same quarter in the previous year and adjusted operating earnings doubled from $0.78 to $1.82. Constellation (NASDAQ:CEG) plans to buy back $1.5 billion worth of shares, which reflects management’s confidence in the company’s long-term prospects. Constellation (NASDAQ:CEG) is expected to grow its earnings by 45.84% this year. Industry analysts have a consensus on the stock’s Buy rating, forecasting an average share price target at $225.03, which represents a 16% upside potential from current levels.
Constellation Energy (NASDAQ:CEG) issued a $900 million, 30-year corporate green bond during the first quarter for initiatives such as nuclear upgrades, clean hydrogen production, and energy storage systems, which will increase the production of clean, carbon-free energy. Constellation Energy (NASDAQ:CEG) has long-term contracts for the purchase of sustainable energy with major tech players such as Microsoft, Google, and Nucor Steel, which provides a stable, long-term revenue stream.
Constellation Energy (NASDAQ:CEG) plans to invest $800 million in upgrading equipment at the Byron and Braidwood nuclear plants in Illinois which will increase its energy output by 158 megawatts. Additionally, the company is investing $350 million to upgrade the Criterion wind project in Maryland, which will increase clean energy production by 79,000 megawatt-hours (MWh). In its second quarter investor letter ClearBridge stated the following regarding Constellation Energy (NASDAQ:CEG) in its Q2 2024 investor letter:
“On a regional basis, the U.S. and Canada was the top contributor for quarter, with U.S. electric utility Constellation Energy Corporation (NASDAQ:CEG) and U.S. rail operator CSX the lead performers. Constellation Energy is primarily a nuclear generation company and is the largest producer of carbon-free electricity in the U.S., serving states including New York, Illinois, Maryland, Pennsylvania and New Jersey. The company’s combined generation capacity is more than 32 GW and 90% of annual output is carbon free. Constellation has been a beneficiary of AI and subsequent power demand as its 24/7 base load nuclear generation can get premium contracts.”
Constellation Energy (NASDAQ:CEG) is well-positioned to capitalize on recent trend of renewable energy and presents a compelling opportunity for long-term investors. As of September 2, the company has a market cap of $61.5 billion. The company’s stock was held by 71 hedge funds in the second quarter, with stakes worth $3.78 billion. As of June 30, Coatue Management is the largest shareholder in the company and owns stocks worth $982.90 million.
