Is NRG Energy Inc (NRG) A Good Stock To Buy?

Due to the fact that NRG Energy Inc (NYSE:NRG) has experienced a declining sentiment from the aggregate hedge fund industry, it’s easy to see that there were a few funds that elected to cut their full holdings heading into Q4. Intriguingly, Jonathan Barrett and Paul Segal’s Luminus Management cut the largest position of all the hedgies watched by Insider Monkey, worth close to $80.8 million in stock. Phill Gross and Robert Atchinson’s fund, Adage Capital Management, also dumped its stock, about $26.7 million worth. These moves are intriguing to say the least, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).

Let’s check out hedge fund activity in other stocks similar to NRG Energy Inc (NYSE:NRG). These stocks are City National Corp (NYSE:CYN), Starwood Property Trust, Inc. (NYSE:STWD), Southwestern Energy Company (NYSE:SWN), and Pinnacle Foods Inc (NYSE:PF). This group of stocks’ market caps resembles NRG Energy Inc (NYSE:NRG)’s market cap.

As you can see, these stocks had an average of 31 hedge funds with bullish positions and the average amount invested in these stocks was $650 million. That figure was $720 million in NRG Energy Inc (NYSE:NRG)’s case. Southwestern Energy Company (NYSE:SWN) is the most popular stock in this table. On the other hand, City National Corp (NYSE:CYN) is the least popular one with only 21 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. This is a slightly positive signal, but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard, Southwestern Energy Company (NYSE:SWN) might be a better candidate to consider a long position.