We recently compiled a list of the Top 10 Stocks to Buy According to Lone Pine Capital. In this article, we are going to take a look at where Vistra Corp. (NYSE:VST) stands against the other stocks.

Lone Pine Capital, established in 1997 by Stephen Mandel, is a leading hedge fund and investment advisory firm based in Greenwich, Connecticut. The firm also operates offices in major financial hubs, including London, New York City, and San Francisco. Over the years, Lone Pine Capital has built a strong reputation in the investment world, focusing on long-term growth strategies. The firm’s disciplined approach to stock selection and asset management has enabled it to maintain a significant presence in the hedge fund industry.

Stephen Mandel, the founder of the firm, has had an extensive career in finance even before launching Lone Pine Capital. He previously worked as a managing director at Tiger Management, gaining valuable experience in investment strategy. A graduate of Dartmouth College with a degree in government, Mandel later earned an MBA from Harvard University. His expertise and leadership led to his ranking in the highest-earning categories among Forbes’ top hedge fund managers multiple times between 2012 and 2018. Although Mandel stepped away from active investment management in 2019, he continues to serve as a managing director at the firm. As of Q4 2024, Lone Pine Capital managed nearly $13.5 billion in 13F securities spread across 30 companies, with its top 10 holdings accounting for 55.89% of its portfolio.

Lone Pine Capital’s investment philosophy is rooted in identifying transformative changes that can unlock or accelerate value. By leveraging institutional knowledge and deep expertise across sectors and global markets, the firm continuously reassesses its investment theses and uncovers new opportunities. It strategically times market entry by recognizing key turning points in economic and industry cycles, allowing it to capitalize on shifts before they become widely apparent. The firm also prioritizes long-term value creation, typically holding investments for two to three years, though it has held stocks of certain companies for decades. This disciplined approach aligns investment timelines with investor expectations, optimizing returns. Additionally, Lone Pine Capital remains highly responsive to innovation in various forms—whether through technological advancements, business model evolution, or leadership changes—adapting its strategies based on emerging data and shifting market dynamics.

Moreover, the hedge fund’s investment strategies are designed to achieve long-term capital appreciation through a disciplined and research-driven approach. For its long-only strategy, the firm focuses on high-conviction investments in companies with strong growth potential, maintaining a diversified portfolio primarily across North America and Europe while limiting exposure to emerging markets. Its long/short equity strategy follows a similar approach, combining concentrated long positions with a diversified selection of short investments to navigate market fluctuations effectively. Net exposure varies based on market conditions and available opportunities, ensuring flexibility in positioning. In private investments, the firm applies its extensive research capabilities to identify promising companies in sectors such as software, financial technology, healthcare, and consumer markets. By targeting capital-efficient businesses with significant public market potential, Lone Pine Capital seeks to maximize returns through selective, high-impact investments.

Our Methodology

The stocks discussed below were picked from Lone Pine Capital’s Q4 2024 13F filings. They are compiled in the ascending order of the hedge fund’s stake in them as of December 31, 2024. To assist readers with more context, we have included the hedge fund sentiment regarding each stock using data from 1008 hedge funds tracked by Insider Monkey in the fourth quarter of 2024.

Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).

Vistra Corp. (NYSE:VST)

Number of Hedge Fund Holders as of Q4: 120

Lone Pine Capital’s Equity Stake: $738.01 Million 

Vistra Corp. (NYSE:VST), a major integrated retail electricity and power generation company, reported strong financial and operational performance for 2024, supported by its diverse energy portfolio, including natural gas, nuclear, coal, solar, and battery storage facilities. For the quarter ending December 2024, the company achieved a net income of $490 million. It reported $4.56 billion in cash flow from operations for the year ended December 2024. Net income from ongoing operations stood at $2.93 billion, while ongoing operations adjusted EBITDA reached $5.66 billion, surpassing the midpoint of its initial guidance by $856 million, underscoring Vistra’s strong financial position and effective execution of its strategic initiatives.

Vistra Corp. (NYSE:VST) reaffirmed its 2025 financial guidance, projecting ongoing operations adjusted EBITDA between $5.5 billion and $6.1 billion, along with adjusted free cash flow before growth (FCFbG) ranging from $3.0 billion to $3.6 billion. The company has secured hedging for nearly all its anticipated generation volumes for 2025 and approximately 80% for 2026, reinforcing its confidence in meeting these targets. Additionally, it reiterated its 2026 adjusted EBITDA midpoint opportunity, expected to exceed $6.0 billion, reflecting its strategic approach to risk management and long-term financial stability. With strong cash flow generation, effective hedging strategies, and a positive earnings outlook, Vistra presents a compelling investment opportunity for those seeking exposure to the energy sector.

During the February 27, 2024, earnings call, Vistra Corp. (NYSE:VST) President and CEO Jim Burke highlighted the company’s record-breaking and transformational year, attributing its success to the dedication and expertise of its workforce. Over the past 12 months, the company completed a major acquisition, adding three nuclear sites, nearly one million retail customers in the PJM market, and 2,000 new employees, positioning itself as the second-largest competitive nuclear operator in the U.S. Additionally, Vistra expanded its renewable energy footprint by launching two solar-plus-storage facilities and securing two major power purchase agreements. Burke emphasized that these achievements reflect the strength of the company’s integrated business model; with a solid foundation and strategic alignment with industry electrification trends, Vistra Corp. (NYSE:VST) is well-positioned to execute its 2025 priorities and sustain long-term value for shareholders.

Carillon Eagle Mid Cap Growth Fund stated the following regarding Vistra Corp. (NYSE:VST) in its Q3 2024 investor letter:

“Vistra Vistra Corp. (NYSE:VST) is an integrated retail electricity and power generation company. As an independent power producer (IPP), Vistra primarily generates revenue from selling its generated power at the prevailing market price. As a result of recent growth in future power demand, the company’s shares have soared on investors’ expectations for future power prices. The potential for Vistra to announce future power purchase agreements (PPAs) with large technology companies in order to satisfy the extraordinary power requirements of these companies’ artificial intelligence (AI) endeavors, in a similar manner to some of Vistra’s closest IPP peers, has also provided a tailwind for the stock.”

Overall VST ranks 5th on our list of the stocks to buy according to Lone Pine Capital. While we acknowledge the potential for VST as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than VST but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

READ NEXT: 20 Best AI Stock To Buy Now and Complete List of 59 AI Companies Under $2 Billion in Market Cap

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