NRG Energy Inc (NRG) Shares Fall After Company Sells Off Two Power Plants

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NRG Energy Inc (NYSE:NRG) has today announced that they have sold two of their power plants for $138 million. The 525 MW Seward plant and the 352 MW Shelby County plant have been purchased by two separate companies. The news has sent the stock tumbling.

An affiliate of Rockland Capital LLC has agreed to acquire the Shelby County power plant while Seward Generation LLC will acquire the other facility. The move is part of a larger restructing plan that NRG Energy Inc (NYSE:NRG) has established in order to cut costs by $150 million in 2016.

“Operating a diverse generation fleet is a key component of NRG’s continued success in every region in which we operate,” Mauricio Gutierrez, COO of NRG, explained. “As part of our asset optimization initiative, we’ve identified a few specific facilities that would be better suited in other hands in markets where we can transact at good value while avoiding future capital expenditures.”

The stock is down 12.55% or $1.55 following the news, hitting $10.8 per share. About 11.52 million shares traded hands or 64.57% up from the average. NRG has declined 51.87% since April 29, 2015 and is downtrending. It has underperformed the S&P500 by 51.67%.

From a total of 10 analysts covering NRG Yield (NYSE:NRG) stock, 7 rate it a “Buy”, 1 a “Sell”, and 2 a “Hold”. This means that 70% of the ratings are positive. The highest target price is $36 while the lowest target price is $15. The mean of all analyst targets is $25.57 which is 136.76% above today’s ($10.8) stock price. NRG Yield was the topic of 11 analyst reports since August 10, 2015 according to the firm StockzIntelligence Inc. Citigroup initiated shares on December 1 with a “Sell” rating. Barclays Capital maintained NRG stock in a recent report from September 21 with a “Buy” rating. Finally, Wolfe Research downgraded the stock to a “Outperform” rating in a report they issued on an August 10.

The institutional sentiment decreased to 0.79 in Q2 2015. It’s down 0.07, from 0.86 in 2015Q1. The ratio dropped, as 48 funds sold all their NRG Energy Inc shares they owned while 141 reduced their positions. 32 funds bought stakes while 117 increased their total positions. Institutions now own 328.64 million shares which is 2.17% less than the previous share count of 335.92 million in 2015Q1.

Bocage Capital Llc holds 6.69% of its total portfolio in NRG Energy Inc, equating to 541,688 shares. Community Bank Of Raymore owns 448,260 shares representing 5.35% of their total US portfolio. Moreover, Passport Capital Llc has 4.07% of their total portfolio invested in the company, equating to 8.82 million shares. The New York-based Fic Capital Inc has a total of 3.12% of their portfolio invested in the stock. Luminus Management Llc, a New York-based fund reported 3.53 million shares owned.

NRG Energy, Inc. is a power company that produces, sells and delivers energy, and energy services and products in power markets in the United States. The company has a market cap of $3.96 billion. NRG’s business divisions are NRG Business, NRG Home, NRG Renew, NRG Yield and corporate activities. It currently has negative earnings. NRG Business consists of NRG’s wholesale operations, including plant operations, commercial operations, engineering, procurement and construction (EPC), energy services and other related functions.

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