Is Constellation Energy Corporation (CEG) an Example of a “Deep Value” Holding?

Heartland Advisors, an investment management company, released its “Heartland Mid Cap Value Fund” third quarter 2022 investor letter. A copy of the same can be downloaded here. In the third quarter, Mid Cap Value Investor Class returned -5.06% and Mid Cap Value Institutional Class returned -5.03% compared to a -4.93% return for the Russell Midcap Value Index. Initially, in the third quarter, the fund lagged behind its benchmark, the Russell Mid Cap Value Index. But at the end of the third quarter, the fund was able to close the gap compared to the benchmark index and outperformed year-to-date. Security selection contributed to the fund’s performance in the quarter. Financials and Utility sectors outperformed, while Consumer Discretionary, Consumer Staples, and Energy sectors detracted from the performance. In addition, you can check the top 5 holdings of the fund to know its best picks in 2022.

Heartland Advisors discussed stocks like Constellation Energy Corporation (NASDAQ:CEG) in the third-quarter investor letter. Headquartered in Baltimore, Maryland, Constellation Energy Corporation (NASDAQ:CEG) is an electricity generation and distributing company. On October 12, 2022, Constellation Energy Corporation (NASDAQ:CEG) stock closed at $82.16 per share. One-month return of Constellation Energy Corporation (NASDAQ:CEG) was -6.69% and its shares gained 37.35% of their value over the last 3 months. Constellation Energy Corporation (NASDAQ:CEG) has a market capitalization of $27.45 billion.

Here is what Heartland Advisors specifically said about Constellation Energy Corporation (NASDAQ:CEG) in its Q3 2022 investor letter:

“Our best-performing holding in the quarter was Constellation Energy Corporation (NASDAQ:CEG) in the utilities sector. CEG is a great example of “deep value” holding with a self-help catalyst and is the leading provider of clean energy in the U.S., derived primarily from nuclear power. Earlier this year, the company was spun-off from a prior long-term utility holding. Post spin-off, we increased our position in CEG on the belief that the company was materially undervalued and catalysts were in place to change investors’ perception.

One of those catalysts was the August passage of the Inflation Reduction Act of 2022. Nuclear power has never benefitted from its zero-carbon emitting properties, like wind and solar. This legislation provides nuclear power plants with zero-carbon treatment, establishing a “floor” under power prices that could protect CEG from much of the potential downside swings in commodity power prices.”

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Constellation Energy Corporation (NASDAQ:CEG) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 43 hedge fund portfolios held Constellation Energy Corporation (NASDAQ:CEG) at the end of the second quarter which was 47 in the previous quarter.

We discussed Constellation Energy Corporation (NASDAQ:CEG) in another article and shared the list of energy stocks to buy according to billionaire David Harding. In addition, please check out our hedge fund investor letters Q3 2022 page for more investor letters from hedge funds and other leading investors.

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Disclosure: None. This article is originally published at Insider Monkey.