Looking at the following stock chart of NRG would lead someone to believe that NRG has been doing quite well for itself this year, and they have. Shares have gone up close to 50% this year and are recently trading at $24 per share.
Unfortunately, this chart would not show the virtually side-ways movement this stock has been traveling in for the past four years. Because of such lackluster results, many would turn to management for an indication of bad leadership but, its hard to blame anyone as hard working as current CEO David Crane.
In the past four years, David Crane, has managed to:
1. Dodge a takeover on the grounds that the business was being valued substantially below its intrinsic value.
2. Lead NRG on a project to build a nuclear power plant in Texas, a project that was ultimately failed to receive needed government backing.
3. Purchased Reliant Energy, a major source of its current profits.
4. Increased solar energy production.
5. Repurchased massive amounts of shares at depressed prices.
6. Acquired GenOn Energy, nearly doubling NRG's prior generation capacity.
What else does a guy need to do?
It seems to me, the one kink in Mr. Crane's armor has been extremely low natural gas prices. But, who can blame him for that?
As usual, recently reported earnings continued to shower investors with good news:
-Full Year 2012 adjusted EBITDA of $1.9 billion, up 5%.
-$898 million in free cash flow before projects, up 9%.
-Plan to increase dividend by 33% to $0.48 per share annually (close to 2% per year).
Frustrating share prices over the last four years may have investors ready to leave. Unfortunately, selling out of positions is hard to justify as NRG continues to deliver solid numbers and increased shareholder values. I guess I will be sitting on my shares for a while, continuing to think JUST ONE TIME stock market, JUST ONE TIME!
Disclaimer: The author is not a registered investment advisor and does not provide specific investment advice. Data is sourced from Yahoo Finance and company reports. This information is for informational purposes only. As always, please do not invest more than you can afford to lose!
Disclosure: I am long NRG.