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Hedge Funds Are Buying NRG Energy Inc (NYSE:NRG)

NRG Energy Inc (NYSE:NRG) was in 34 hedge funds’ portfolio at the end of December. NRG has experienced an increase in enthusiasm from smart money lately. There were 26 hedge funds in our database with NRG positions at the end of the previous quarter.

To the average investor, there are plenty of metrics investors can use to monitor their holdings. A couple of the most underrated are hedge fund and insider trading movement. At Insider Monkey, our research analyses have shown that, historically, those who follow the top picks of the elite hedge fund managers can beat the S&P 500 by a very impressive margin (see just how much).

NRG Energy Inc (NYSE:NRG)

Equally as integral, bullish insider trading sentiment is a second way to parse down the investments you’re interested in. Just as you’d expect, there are a variety of incentives for a bullish insider to get rid of shares of his or her company, but only one, very clear reason why they would initiate a purchase. Plenty of empirical studies have demonstrated the impressive potential of this tactic if piggybackers know what to do (learn more here).

Keeping this in mind, we’re going to take a glance at the key action encompassing NRG Energy Inc (NYSE:NRG).

Hedge fund activity in NRG Energy Inc (NYSE:NRG)

At year’s end, a total of 34 of the hedge funds we track were bullish in this stock, a change of 31% from the third quarter. With the smart money’s capital changing hands, there exists a select group of key hedge fund managers who were upping their stakes significantly.

Of the funds we track, Richard Perry’s Perry Capital had the largest position in NRG Energy Inc (NYSE:NRG), worth close to $178 million, accounting for 6.6% of its total 13F portfolio. Coming in second is Israel Englander of Millennium Management, with a $108 million position; 0.4% of its 13F portfolio is allocated to the company. Remaining hedgies that are bullish include Jeffrey Bersh and Michael Wartell’s Venor Capital Management, John Paulson’s Paulson & Co and Clint Carlson’s Carlson Capital.

As one would reasonably expect, key hedge funds were breaking ground themselves. Paulson & Co, managed by John Paulson, established the most valuable position in NRG Energy Inc (NYSE:NRG). Paulson & Co had 71 million invested in the company at the end of the quarter. Jim Simons’s Renaissance Technologies also made a $33 million investment in the stock during the quarter. The other funds with new positions in the stock are Howard Marks’s Oaktree Capital Management, George Soros’s Soros Fund Management, and Jon Bauer’s Contrarian Capital.

Insider trading activity in NRG Energy Inc (NYSE:NRG)

Insider buying is best served when the company we’re looking at has experienced transactions within the past half-year. Over the latest six-month time frame, NRG Energy Inc (NYSE:NRG) has seen zero unique insiders buying, and 1 insider sales (see the details of insider trades here).

With the returns shown by our time-tested strategies, retail investors must always watch hedge fund and insider trading activity, and NRG Energy Inc (NYSE:NRG) applies perfectly to this mantra.

Click here to learn more about Insider Monkey’s Hedge Fund Newsletter

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