Jim Cramer’s ‘Ignore the Chatter’ Guide: 10 Stocks to Buy Today

4. Vistra Corp. (NYSE:VST)

Number of Hedge Fund Investors: 79

Jim Cramer is telling callers to his CNBC show to “definitely” hold on to Vistra Corp. (NYSE:VST) stock, which makes sense given that it has risen 106.57% in the year to date as of August 9.

Vistra Corp. (NYSE:VST) is based in Texas and acts as one of the largest integrated power producers in the country. At the end of May, Morgan Stanley reiterated its “Buy” rating for Vistra Corp. (NYSE:VST) with a price target of $110, up from $86. Analysts believe the firm’s focus on renewable energy and its robust cash flow generation are key factors supporting shareholder value and long-term growth.

Legacy Ridge Capital had this to say about Vistra Corp. (NYSE:VST) in its Q2 2024 investor letter:

“One of the sectors we know well which had been out of favor for several years has quickly come into favor: Independent Power Producers (IPPs). We’ve written consistently about NRG and Vistra Corp. (NYSE:VST) since the 2019 letter, have owned each, or both, since 2018, and invested a meaningful amount of our assets in VST specifically the past few years. Nate and I intend on spending more time in the year-end letter on our updated views on the IPPs and our learnings from the on-going investment, but we were a bit surprised how quickly the narrative around these companies changed. Our Blue Sky 2030 estimates of intrinsic value converged with the share price 6-years before we thought probable. In the 2019 letter, with respect to VST, we wrote:

“Over the next decade management should have close to $15 Billion to deploy to share repurchases. If you assume they have to pay an average price for the stock that’s higher than the current one, and they can only repurchase 60% of shares outstanding instead of the 100% the math implies, FCF per share in 2030 would be $14. That’s a $70 stock at today’s valuation, but a $140 stock at a more reasonable FCF yield of 10%.” And… “The IPPs are un-investable for most money managers, so there we are. When they become investable we’ll probably be long gone.”