CrowdThnk Blog


NRG Energy rockets higher on plan to sell subsidiary stake

NRG Energy Inc., the largest U.S. independent power producer, rocketed over 10% on the week ending November 3rd after disclosing in its Q3 Earnings call that it’ll sell its entire stake in its subsidiary, NRG Yield Inc., a yield company that holds renewable and conventional power plants.  NRG Energy Inc. started the week with a CrowdThnk Positioning Score of +9.30, indicating an overweight and heavily subscribed investor positioning in the stock.  CrowdThnk's proprietary algorithm had forecasted a 61% probability of a move higher over the next week given NRG's Positioning Score of +9.30.  Despite this elevated market positioning, NRG has continued to reward market investors with a return close to 130% this year after starting the year around $12.20. These solid returns continue to attract investors to purchase the company’s stock as its corporate actions have been signalled as a positive transformation of the company.

NRG is in the midst of a restructuring plan to sell assets, cut costs and eliminate debt after activist investors led by billionaire Paul Singer’s Elliott Management Corp. and C. John Wilder’s Bluescape Energy Partners took a stake in the company. NRG said it sees getting as much as $4 billion from asset sales and has reduced debt by $600 million this year. Its cost cutting plan is ahead of schedule with $92 million in reduced expenses and an acquisition to add about $8.8 million in annual cash available for distribution starting next year.