Do Hedge Funds and Insiders Love NRG Energy Inc (NRG)?

Is NV Energy, Inc. (NYSE:NVE) a buy?

At the moment, there are tons of indicators shareholders can use to analyze their holdings. Two of the most underrated are hedge fund and insider trading interest. At Insider Monkey, our research analyses have shown that, historically, those who follow the top picks of the elite fund managers can trounce their index-focused peers by a solid margin (see just how much).

Just as key, positive insider trading sentiment is another way to look at the marketplace. Just as you’d expect, there are lots of reasons for a corporate insider to sell shares of his or her company, but only one, very simple reason why they would behave bullishly. Various empirical studies have demonstrated the impressive potential of this strategy if piggybackers know what to do (learn more here).

Now that that’s out of the way, it’s important to examine the latest info about NRG Energy Inc (NYSE:NRG).

How have hedgies been trading NRG Energy Inc (NYSE:NRG)?

In preparation for the third quarter, a total of 34 of the hedge funds we track held long positions in this stock, a change of -8% from the previous quarter. With hedge funds’ capital changing hands, there exists a select group of key hedge fund managers who were boosting their holdings considerably.

According to our 13F database, Clint Carlson’s Carlson Capital had the most valuable position in NRG Energy Inc (NYSE:NRG), worth close to $258.1 million, accounting for 3.1% of its total 13F portfolio. Sitting at the No. 2 spot is Perry Capital, managed by Richard Perry, which held a $178.8 million position; 4.6% of its 13F portfolio is allocated to the company. Other peers with similar optimism include Israel Englander’s Millennium Management, Doug Silverman and Alexander Klabin’s Senator Investment Group and Andrew Feldstein and Stephen Siderow’s Blue Mountain Capital.

Since NRG Energy Inc (NYSE:NRG) has experienced dropping sentiment from the entirety of the hedge funds we track, we can see that there is a sect of hedge funds who sold off their entire stakes heading into Q2. It’s worth mentioning that Jim Simons’s Renaissance Technologies dumped the biggest position of all the hedgies we watch, worth close to $64.5 million in call options., and Jeffrey Bersh and Michael Wartell of Venor Capital Management was right behind this move, as the fund said goodbye to about $56.2 million worth. These bearish behaviors are important to note, as total hedge fund interest dropped by 3 funds heading into Q2.

How are insiders trading NRG Energy Inc (NYSE:NRG)?

Insider buying made by high-level executives is best served when the company in question has experienced transactions within the past 180 days. Over the last half-year time frame, NRG Energy Inc (NYSE:NRG) has experienced zero unique insiders buying, and 3 insider sales (see the details of insider trades here).

We’ll also review the relationship between both of these indicators in other stocks similar to NRG Energy Inc (NYSE:NRG). These stocks are NV Energy, Inc. (NYSE:NVE), Northeast Utilities System (NYSE:NU), CenterPoint Energy, Inc. (NYSE:CNP), NiSource Inc. (NYSE:NI), and Ameren Corp (NYSE:AEE). This group of stocks belong to the diversified utilities industry and their market caps are closest to NRG’s market cap.

Using the returns demonstrated by the previously mentioned research, regular investors must always watch hedge fund and insider trading sentiment, and NRG Energy Inc (NYSE:NRG) is an important part of this process.

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