The Insider Monkey team has completed processing the quarterly 13F filings for the March quarter submitted by the hedge funds and other money managers included in our extensive database. Most hedge fund investors experienced strong gains on the back of a strong market performance, which certainly propelled them to adjust their equity holdings so as to maintain the desired risk profile. As a result, the relevancy of these public filings and their content is indisputable, as they may reveal numerous high-potential stocks. The following article will discuss the smart money sentiment towards NRG Energy Inc (NYSE:NRG).
NRG Energy Inc (NYSE:NRG) investors should pay attention to an increase in hedge fund interest lately. NRG Energy Inc (NYSE:NRG) was in 35 hedge funds’ portfolios at the end of March. The all time high for this statistic is 50. Our calculations also showed that NRG isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings).
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Michael Platt of BlueCrest Capital Mgmt.
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Do Hedge Funds Think NRG Is A Good Stock To Buy Now?
At Q1’s end, a total of 35 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 13% from the fourth quarter of 2020. On the other hand, there were a total of 38 hedge funds with a bullish position in NRG a year ago. With the smart money’s capital changing hands, there exists a select group of key hedge fund managers who were upping their holdings substantially (or already accumulated large positions).
The largest stake in NRG Energy Inc (NYSE:NRG) was held by Pzena Investment Management, which reported holding $351.1 million worth of stock at the end of December. It was followed by Permian Investment Partners with a $259.3 million position. Other investors bullish on the company included Steadfast Capital Management, Lyrical Asset Management, and BlueCrest Capital Mgmt.. In terms of the portfolio weights assigned to each position Permian Investment Partners allocated the biggest weight to NRG Energy Inc (NYSE:NRG), around 32.29% of its 13F portfolio. MD Sass is also relatively very bullish on the stock, dishing out 5.46 percent of its 13F equity portfolio to NRG.
Now, specific money managers have jumped into NRG Energy Inc (NYSE:NRG) headfirst. BlueCrest Capital Mgmt., managed by Michael Platt and William Reeves, assembled the most valuable position in NRG Energy Inc (NYSE:NRG). BlueCrest Capital Mgmt. had $131.7 million invested in the company at the end of the quarter. Doug Silverman and Alexander Klabin’s Senator Investment Group also initiated a $65.2 million position during the quarter. The following funds were also among the new NRG investors: Christian Leone’s Luxor Capital Group, Steven Tananbaum’s GoldenTree Asset Management, and Leon Cooperman’s Omega Advisors.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as NRG Energy Inc (NYSE:NRG) but similarly valued. We will take a look at Under Armour Inc (NYSE:UA), The Middleby Corporation (NASDAQ:MIDD), Amdocs Limited (NYSE:DOX), CRISPR Therapeutics AG (NASDAQ:CRSP), Maravai LifeSciences Holdings, Inc. (NASDAQ:MRVI), BridgeBio Pharma, Inc. (NASDAQ:BBIO), and Pinnacle West Capital Corporation (NYSE:PNW). All of these stocks’ market caps match NRG’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| UA | 51 | 1910459 | 4 |
| MIDD | 28 | 520500 | -2 |
| DOX | 32 | 716631 | 12 |
| CRSP | 27 | 1407504 | -7 |
| MRVI | 26 | 401044 | -8 |
| BBIO | 26 | 2899063 | 3 |
| PNW | 15 | 145574 | -9 |
| Average | 29.3 | 1142968 | -1 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 29.3 hedge funds with bullish positions and the average amount invested in these stocks was $1143 million. That figure was $1606 million in NRG’s case. Under Armour Inc (NYSE:UA) is the most popular stock in this table. On the other hand Pinnacle West Capital Corporation (NYSE:PNW) is the least popular one with only 15 bullish hedge fund positions. NRG Energy Inc (NYSE:NRG) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for NRG is 57.8. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 19.3% in 2021 through June 25th and beat the market again by 4.8 percentage points. Unfortunately NRG wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on NRG were disappointed as the stock returned 2.9% since the end of March (through 6/25) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as many of these stocks already outperformed the market since 2019.
Follow Nrg Energy Inc. (NYSE:NRG)
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Disclosure: None. This article was originally published at Insider Monkey.
