Luminus Management Trying to Light the Way to Big Returns With These Utilities Stocks

3. Dominion Resources, Inc. (NYSE:D)

Dominion Resources, Inc. (NYSE:D) is one of the utility stocks Luminus is optimistic about, having increased its investment in it by 18% during the quarter. Luminus Management held a little over 1.2 million shares at the end of March, a position valued at $90.6 million. The company released its first quarter earnings on May 4, which met analysts’ expectations. Dominion Resources, Inc. (NYSE:D) posted $2.92 billion in revenue, down by 15% year-over-year, and a profit of $0.96 per share when adjusted for non-recurring costs. The company recently took another step in its bid to become more eco-friendly, firing up its brand new Brunswick Power Station on April 26, which uses natural gas and energy efficient technology to produce electricity. The station can produce enough electricity to power up to 325,000 homes and is expected to generate fuel savings of roughly $100 million in the first year of use. Jim Simons‘ quantitative models have also issued a bullish signal on Dominion Resources, as his fund Renaissance Technologies upped its stake in the company by 60% during the first quarter. Valued at $124 million, the fund’s position amounted to 1.65 million shares and was the largest among the funds followed by Insider Monkey.

2. FirstEnergy Corp. (NYSE:FE)

The popularity of FirstEnergy Corp. (NYSE:FE) among the funds tracked by Insider Monkey inched up during the first quarter, as the number of long positions reported by elite funds rose by one to 27. Cliff Asness was buying FirstEnergy shares left and right, boosting his fund’s investment by 359% over the course of the first quarter. AQR Capital Management reportedly held 3.93 million shares of FirstEnergy valued at $141 million. Messrs. Barrett and Segal reduced their stake in the company by 22% during the quarter, but still held 5.91 million shares worth $212 million. By the end of April, FirstEnergy Corp. (NYSE:FE) was up by 14% and trading around the $36 level, only to fall 10% on April 28 after the Federal Energy Regulatory Commission blocked income guarantees the company had previously received from Ohio’s public utilities commission. The controversial agreement had guaranteed income for some of FirstEnergy’s aging power plants. Analysts at RBC Capital Markets reacted to the news by downgrading the stock to ‘Sector Perform’ from ‘Outperform’, while lowering their price target on it to $33 per share.

1. PG&E Corporation (NYSE:PCG)

Luminus’ number one bet heading into the second quarter was in PG&E Corporation (NYSE:PCG), a company in which the fund first established a position in back in 2010. Their fund’s stake in the company was increased by 16% during the first quarter, reaching 3.94 million shares valued at $235 million. PG&E Corporation (NYSE:PCG) is well-liked among other top hedge funds as well, with the stock being found in the portfolios of 26 of them at the end of the first quarter, compared to just 19 at the end of December. Based in San Francisco, California, PG&E Corporation (NYSE:PCG) has a market cap of $30 billion and pays an annual dividend of $1.82 per share, which equates to an annual yield of 3%. The stock’s movement since the beginning of 2016 resembles a montagne russe, yet it has still managed to climb 14% to $60.20 per share. Israel Englander’s Millennium Management also holds a sizable position in this stock amounting to 5.39 million shares, up by 41% for the quarter.

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