3. Constellation Energy (NASDAQ:CEG)
Number of Hedge Fund Holders: 71
Market Capitalization as of August 20: $59.48 Billion
Constellation Energy (NASDAQ:CEG) is a supplier of power, natural gas, and energy products and services. The company serves a diverse range of customers, including residential, commercial, and industrial clients across North America. Constellation Energy (NASDAQ:CEG) is a major player in the renewable energy sector, particularly in nuclear power, and is committed to delivering clean and affordable energy. Constellation Energy (NASDAQ:CEG) is a leader in carbon-free energy and contributes 10% of the carbon-free energy consumed in the United States.
The company’s financial performance and strategic investments in clean energy solutions make it a compelling long-term investment. In Q1 2024, Constellation Energy’s (NASDAQ:CEG) net income per share increased from $0.29 in Q1 2023 to $2.78 in Q1 2024, while adjusted operating earnings doubled from $0.78 to $1.82. The company plans to buy back $1.5 billion worth of shares, which reflects management’s confidence in the company’s long-term prospects. The company is expected to grow its earnings by 45.84% this year. Industry analysts have a consensus on the stock’s Buy rating, setting an average share price target at $225.03, which represents a 16% upside potential from its current level.
Constellation Energy (NASDAQ:CEG) also plans to expand its clean energy portfolio and issued a $900 million, 30-year corporate green bond for initiatives such as nuclear upgrades, clean hydrogen production, and energy storage systems, which are crucial for increasing the production of clean, carbon-free energy. Major tech players such as Google, Microsoft, and Nucor Steel, have a long-term contract for the purchase of sustainable energy with Constellation Energy (NASDAQ:CEG), which will provide a stable, long-term revenue stream for the company. The company plans to invest $800 million in upgrading equipment at its Braidwood and Byron plants in Illinois which is expected to boost energy output by 158 megawatts. Additionally, the repowering of the Criterion wind project in Maryland 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):
“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’s (NASDAQ:CEG) financial performance, leadership in carbon-free energy production, strategic partnerships, and ongoing investments in clean energy infrastructure provide a solid foundation for long-term growth. Constellation Energy (NASDAQ:CEG) is a compelling investment for those with a long-term perspective. The company is valued at $59.48 billion as of August 20. As of the second quarter, the stock is held by 71 hedge funds with stakes worth $3.78 billion. Coatue Management is the largest shareholder in the company and has stocks worth $982.90 million as of June 30.
