NRG Investment Analysis Report & Stock Research, NRG Energy, Inc.

NRG Energy, Inc. (NRG)

NRG Stock Report

2-Year Price History

View Larger NRG Chart
NYSE:NRG
$22.08
(3/18 1:26PM)
-1.7%
Open$22.59 Mkt Cap$5.9 Billion
High$22.6 52Wk High$29.26
Low$22.03 52Wk Low$16.50
Volume1.6 Million Avg Vol 10D3.3 Million

Ockham's Rating/Recommendation Summary

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NRG Revenue

As a value investing shop, we are interested in seeing how NRG's revenues measure up against past performances. One easily understandable way of doing that is to compare Price to Sales per share levels over a given time frame. Assuming it is available, Ockham prefers to look at ten years of history (for this stock there are 7 years of history available) and we weigh recent years more heavily. This allows us to find weighted average historical high and low Price to Sales ratios, which give us a better idea of the stock's current underlying value. Using this method, we have established a high range for Price to Sales of 1.46x and the low end of the range at 0.75x.

With respect to these historically rational metrics, notice that the current Price to Sales per share ratio for NRG of 0.65x is well below its normal historic Price to Sales levels. At a price of $22.19, NRG is 42% below where we would expect to see it. Clearly, this stock looks undervalued compared to historical levels, at least on a Price to Sales basis. This will positively affect our analysis because it is rare to find a stock this far below historical norms, and we would expect some price appreciation to bring this metric back towards a more normal range.

NRG Cash Earnings

Looking at NRG specifically in their Cash Earnings capabilities, Ockham views NRG as significantly below their historical average multiples of Cash Earnings, as calculated by our proprietary analysis. It is incredibly important to understand that for NRG, the current level of Cash Earnings compared to its historical levels helps identify where NRG is in relation to what the investing community was willing to pay for this level of Cash Earnings in the past. With a historical high Cash Earnings per share ratio of 7.99 and a historical low Cash Earnings per share ratio of 4.25, an investor can relate where value becomes optimal.

So what does "significantly below" mean when we talk about Price to Cash Earnings numbers for NRG? From the Ockham perspective, we are looking specifically at NRG to see if the market is recognizing the huge disparity between NRG's past stock price to Cash Earnings ratio to today's levels. At a difference of 51% below the average historical Price to Cash Earnings ratio, our view would be quite positive at this point. However, as with all metrics, we need to also take other factors into account when looking at NRG. While we view better Cash Earnings metrics as very important, if the market is slow to identify this value, or if Cash Earnings were to fall from these levels, we would become more neutral in our stance.

NRG Dividends

When determining a company's future prospects for success, Ockham Research sees analysis of dividend payments as a key additional factor. Even though it isn't imperative for NRG to shell out a dividend in order to receive a positive rating, it can be helpful to further our analysis. Although they may currently pay a dividend, our data source has no historical record of it for NRG. Since we cannot apply our historical trend analysis to dividends for NRG we have a neutral score for the dividend portion of our analysis.

Peer Comparison

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NRG Energy, Inc. Industry Grouping

(3/17/2010)
Company Ticker Market Cap (Ml) Latest
Price
Price/Cash Earnings Price/Sales 5-Yr. Rev.
Growth Rate
5-Yr.
Avg. ROE.
Current 10-Yr. Range* Current 10-Yr. Range*
Peer Company Averages (not including NRG) 8.23 3.16 » 12.77 1.86 0.50 » 2.68 2.66% 15.20%
*10 year range does not include current year values
Ameren Corp. AEE $6.1 Billion $25.67 4.29 3.27 » 9.51 0.85 0.65 » 1.90 6.56% 8.74%
Wisconsin Energy Corp. WEC $6.0 Billion $51.19 7.99 3.63 » 8.71 1.42 0.56 » 1.43 3.77% 10.96%
NRG Energy, Inc. NRG $5.9 Billion $22.47 3.04 2.01 » 12.88 0.65 0.43 » 1.87 30.54% 12.36%
EQT Corp. EQT $5.7 Billion $43.62 16.26 3.50 » 25.40 4.53 0.47 » 6.32 1.28% 28.00%
CenterPoint Energy, Inc. CNP $5.7 Billion $14.46 5.01 1.19 » 6.99 0.68 0.12 » 0.84 -0.55% 20.58%
Transalta Corp. TAC $5.0 Billion $22.74 7.60 4.21 » 13.23 1.85 0.70 » 2.92 2.24% 7.72%
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8:19A, Mar. 15,2010 NRG $22.19 NRG Energy, Inc.
Zero Hedge

NRG Energy, Inc. News is Being Covered Right Now on Zero Hedge

The latest news from business television and influential blogs is always available through Ockham's RazorWire, and this news is in relation to NRG Energy, Inc..

Based on our methodology, NRG Energy, Inc. should hold some appeal to value investors as we view it as Undervalued. We noticed recently that in comparison to all other stocks we analyze in the news; NRG has received less coverage from the financial media in business television and blogs. Crowd sentiment is leaning to the bearish side, according to the robust data set collected by the Motley Fool CAPS survey.

“… RECENT RATING ACTIONSNORTHERN TRUST CORP (NTRS)NRG ENERGY INC (NRG)SUPERVALU INC (SVU)CLIFFS NATURAL RESOURCES (CLF)HJ HEINZ CO (HNZ)POTASH CORP OF SASKATCHEWAN (POT)SIRIUS XM ... …”

10:59A, Mar. 12,2010 NRG $22.15 NRG Energy, Inc.
Squawk On The Street

Stay Current on NRG's News on Squawk On The Street

As always, the latest news on NRG is available to Ockham clients through RazorWire, and it was mentioned recently on Squawk On The Street.

Crowd sentiment is favorable on this stock, as measured by the Motley Fool CAPS survey. At present, Ockham has a valuation stance of Undervalued on NRG, as we could see significant price appreciation based on current fundamentals like cash earnings and revenue. When taking into account the amount of news coverage each stock normally sees as a percentage of the total, NRG Energy, Inc. has actually sunk a bit in comparison to the others.

“… Check out NRG ENERGY downgraded to neutral from a buy. That stock down 3. 5% and zoumiez shares surging and first quarter forecasts lower than expected and that stock taking it ... …”

10:29A, Mar. 03,2010 NRG $22.82 NRG Energy, Inc.
Squawk On The Street

Heard on Squawk On The Street: CEO of NRG Discussed

Ockham is always interested to know what the Chief Executive is doing for their company, and we noticed a mention of NRG's CEO on Squawk On The Street.

The Motley Fool CAPS data suggests that investors believe NRG Energy, Inc. will beat the market in the foreseeable future. We consider NRG as Undervalued at the current price of $22.80. According to our methodology, this stock has appreciation potential based on current fundamentals which only improves if earnings or revenue surprise. As we analyze the results from RazorWire, one thing we do is rank each stock in terms of amount of news coverage. Recently, NRG has been less covered in the news compared to the rest of our universe of stocks.

“… We have the ceo of NRG ENERGY one of the largest utilities in the u. S. On capitol hill today to make a push for a cap and trade agreement. Good morning, sir. …”

5:31P, Dec. 11,2009 NRG $25.04 NRG Energy, Inc.
Fast Money

Earnings Discussion for NRG Energy, Inc. on Fast Money

Any suprise in earnings can cause a major swing in stock prices, so we are always on the lookout for the freshest news available for earnings reports or expectations.

Based on our methodology, NRG Energy, Inc. should hold some appeal to value investors as we view it as Undervalued. We noticed recently that in comparison to all other stocks we analyze in the news; NRG has received less coverage from the financial media in business television and blogs. Crowd sentiment is leaning to the bearish side, according to the robust data set collected by the Motley Fool CAPS survey.

“… Production, when you see electricity production rise, obviously the earnings potential increases for the names and potentially the independent look at the name like NRG ENERGY, ... …”

4:28P, Nov. 25,2009 NRG $24.15 NRG Energy, Inc.
Closing Bell

Interested in NRG? See What the Pundits Said on Closing Bell

The latest news from business television and influential blogs is always available through Ockham's RazorWire, and this news is in relation to NRG Energy, Inc..

At present, Ockham has a valuation stance of Undervalued on NRG, as we could see significant price appreciation based on current fundamentals like cash earnings and revenue. When taking into account the amount of news coverage each stock normally sees as a percentage of the total, NRG Energy, Inc. has actually sunk a bit in comparison to the others. Crowd sentiment is favorable on this stock, as measured by the Motley Fool CAPS survey.

“… Utility NRG ENERGY downgraded to neutral. $26 from $33 on the stock. Telling clients nrg will be hurt by lower natural gas prices, down 20% over the last year. …”

6:12A, Nov. 17,2009 NRG $24.29 NRG Energy, Inc.
Squawk Box

Squawk Box Has News on NRG

NRG Energy, Inc. is one of the thousands of companies that Ockham has news analytics on, and it was recently discussed on Squawk Box.

When taking into account the amount of news coverage each stock normally sees as a percentage of the total, NRG Energy, Inc. has actually sunk a bit in comparison to the others. At present, Ockham has a valuation stance of Undervalued on NRG, as we could see significant price appreciation based on current fundamentals like cash earnings and revenue. Crowd sentiment is favorable on this stock, as measured by the Motley Fool CAPS survey.

“… It reesed stakes in conco phillips, NRG ENERGY, moody's, suntrust bank and wellpoint. George soros reported holdings in webco. What are you laughing at? > > …”

4:32P, Nov. 16,2009 NRG $24.29 NRG Energy, Inc.
Closing Bell

See Who is Talking About News from NRG on Closing Bell

The latest news on Closing Bell in regards to NRG came through on RazorWire recently.

When taking into account the amount of news coverage each stock normally sees as a percentage of the total, NRG Energy, Inc. has actually sunk a bit in comparison to the others. At present, Ockham has a valuation stance of Undervalued on NRG, as we could see significant price appreciation based on current fundamentals like cash earnings and revenue. Crowd sentiment is favorable on this stock, as measured by the Motley Fool CAPS survey.

“… NRG ENERGY, that company he cut by 1. 2 million shares. NRG ENERGY is reduced. A new holding, neste, up to 3. 4 million shares, worth $144 that's in addition to the berkshire-ha... …”

3:37P, Jul. 20,2009 NRG $23.70 NRG Energy, Inc.
Countdown to the Closing Bell

NRG Energy, Inc. (NRG) Discussed on Fox Business's Countdown to the Closing Bell

NRG Energy, Inc. is in the news. Find out how this impacts NRG trading on Ockham Research.

Everybody is watching. Caterpillar was upgraded ahead of earnings. More from texas instruments. Earnings, earnings, earnings. NRG ENERGY has shareholder meeting tomorrow and probably put the kabosh or take-over bid on exelon. >> cheryl: robert gray? Steve taking the wind out of

“… taking the wind out of …”

9:07A, Jul. 13,2009 NRG $23.76 NRG Energy, Inc.
Squawk On The Street

NRG Energy, Inc. (NRG) Discussed on CNBC's Squawk On The Street

NRG Energy, Inc. is in the news. Find out how this impacts NRG trading on Ockham Research.

We've got big banks. General electric this week. >>> of course, david faber's turn at bat. He has an exclusive for us this the ceo of NRG ENERGY. The first ber view since they rejected exlon's take over bid. The word on the street and the buzz behind the trading as investors position themselves onslaught that's coming.

“… trading as investors position themselves onslaught that's coming. …”

8:40A, Jul. 09,2009 NRG $23.76 NRG Energy, Inc.
Squawk Box

NRG Energy, Inc. (NRG) Discussed on CNBC's Squawk Box

NRG Energy, Inc. is in the news. Find out how this impacts NRG trading on Ockham Research.

Would he bounding a little bit after six straight sessions down@` in the past few days. $61.29 on the august contract, up $1.15. Insure NRG ENERGY rejecting exelon's improved takeover off after it was upped by 12% last joining us is exelon ceo john roe. It's great to have you on the

“… t's great to have you on the …”

View All NRG Energy, Inc. Stock News

Key Fundamentals

NRG - NRG Energy, Inc. Fundamentals
Price (3/18 1:26PM) $22.08
Volume (3/18 1:26PM) 1.6 Million
Last Close Price $22.47
10 Day Average Volume 3.3 Million
13 Week Price Range $21.34 - $25.80
52 Week Price Range $16.50 - $29.26
LTM Revenue $9.0 Billion
 
Shares Outstanding (12/2009) 261.9 Million
Market Capitalization $5.9 Billion
Shares Held By Institutions 277.9 Million
Institutional Holders 466
% Shares Held By Institutions %
Earnings Per Share (EPS) $3.44
P/E Ratio 6.50
Book Value Per Share $28.77
 
Gross Margin 42.60%
Annual Dividend 0.00
Dividend Yield 0.00%
Beta 0.93
Fiscal Year Ends December

About NRG Energy, Inc.

NRG Energy, Inc. is considered to operate in the Utilities sector. They specifically operate in the Electric Utilities business segment contained within the Utilities industry.

A wholesale power generation company, engaged in the ownership, development, construction & operation of power generation facilities, the transacting in & trading of fuel & transportation services, & the trading of energy, capacity & related products.