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Why NRG Energy Stock Could Continue to Soar

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Why NRG Energy Stock Could Continue to Soar PART 1 OF 5

Why NRG Energy Stock Could Continue to Soar

NRG stock seems strong

NRG Energy (NRG), the largest independent power producer, seems ready to continue its bull run since it has significantly outperformed its peers so far this year. NRG stock has managed to rise 50.0% in 2017. The Utilities Select Sector SPDR ETF (XLU) has risen 6.0% in the last three months.

According to NRG’s SEC (Securities and Exchange Commission) filing on March 16, 2017, NRG director Charles John Wilder, Jr. purchased 1.2 million NRG shares at an average price of $17.47 per share.

Why NRG Energy Stock Could Continue to Soar

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NRG outshined its peers

The above graph shows the stock price movements for NRG Energy against its peers and the broader markets (SPY) (SPX-INDEX). It’s worth noting that NRG Energy is the most volatile stock in the S&P 500 Utilities Index.

When compared to NRG’s rally, peers Dynegy (DYN) and Calpine (CPN) have underperformed, correcting nearly 12.0% so far this year.

The epic rally in NRG Energy stock strengthened after Elliott Management and Bluescape Energy Partners disclosed their 9.4% stake in NRG. Bluescape and Elliott are expecting strategic initiatives that may unlock value to NRG’s shareholders.

NRG Energy and other independent power producers in the United States have been struggling for the last few years due to lower wholesale power prices and weak power demand. Their profits have been significantly squeezed during that period, which led to volatile stock movements.

NRG stock is currently trading 2.0% below its 52-week high of $18.56. It has risen 85.0% from its 52-week low of $9.84.

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