Goldcorp Inc. (USA) (GG), NRG Energy Inc (NRG): This Hedge Fund is Long Energy, Ag and Gold. Why?

At Insider Monkey, we track some of the hedge fund world’s most elite money managers, and one that often flies under the radar, yet is in our top 500 is Clint Carlson’s Carlson Capital. Let’s take a look at the fund’s four largest equity positions, because it’s important to track the smart money’s sentiment; discover the secrets of piggyback investing here.

NRG Energy

First on the list is NRG Energy Inc (NYSE:NRG), in which Carlson’s hedge fund disclosed a $139.8 million stake, up from $65.6 million at the end of 2012. The retail power and electric company sports a forward P/E of 21.1x and has a year-to-date return above 20%, and out of the funds we track, over 30 were invested heading into this year. NRG Energy Inc (NYSE:NRG) has become a player in the wind and solar industries, though most of its revenues are derived from traditional, fossil fuel-based energy sources. The company announced its first ever quarterly dividend last year, and now pas a yield of 1.9%.

With heavy investments made in the LNG space, particularly in Louisiana, Texas and California, there are plenty of reasons why Carlson would be bullish on NRG Energy Inc (NYSE:NRG) and its place in the U.S.’s growing domestic energy boom. A Bay City, Texas investment in nuclear power also gives NRG Energy Inc (NYSE:NRG) an added level of diversity most of its peers simply don’t have, and Wall Street expects it to sport EPS growth in excess of 200% this year—first in the diversified utilities industry. Not surprisingly, this growth is cheap, and trades at a PEG below 1.0.

That’s growth, diversity, yield, and everything else under the sun, at a reasonable price; it’s easy to understand why any investor would be buying.

Virgin Media

With a $139.6 million position, Virgin Media Inc. (NASDAQ:VMED) is next on the list. The hedge fund reported ownership of 2,851,500 shares, and this was a new position. Virgin Media Inc. (NASDAQ:VMED) was bought out by Liberty Global Inc. (NASDAQ:LBTYA) earlier this year, and with the deal set to close in June, there’s not much more room for a merger arbitrage play here—this is likely why Carlson was bullish.

Bunge

We should also mention Bunge Ltd (NYSE:BG), in which the hedge fund raised its position to $131.3 million, from $48.8 million reported in the previous filing. Bunge Ltd (NYSE:BG)’s position as one of the world’s most dominant soybean oil producers is one of its key strengths, and its placement in the South American fertilizer market is an advantage that’s underrated by most investors. The company’s sugarcane ethanol operations are improving, and the company’s yield has improved year-over-year in its latest earnings report.