NRG Energy Inc

Despite recent underperformance due to adverse weather in Texas and higher supply costs, we believe NRG Energy is well-positioned to benefit from the current energy supply/demand environment. The company has several initiatives underway that are expected to result in new data center contracts, which should enhance its growth prospects. While the recent operating results were below expectations, we remain optimistic about NRG's long-term potential in the energy sector.

NRG Energy has demonstrated strong performance with a net return of 78.9% in 2025, contributing 4.0% to our overall performance. Despite this impressive return, NRG Energy remains attractively valued at just 13.7x forward earnings when we normalize depreciation expense and account for the accretion from the company’s LS Power acquisition. This valuation represents a significant discount compared to the S&P 500, indicating that NRG Energy is still undervalued heading into 2026, which supports our decision to add to our position.

NRG Energy was a top contributor in the Fund, with a return of nearly 70%. The company continues to benefit from rising electricity demand needed to fuel the AI revolution. NRG's stock rallied after reporting first quarter 2025 earnings and revenues that significantly exceeded analysts' expectations. Additionally, NRG announced a major acquisition, which will provide additional power-generation capability, a move that was well received by investors.

NRG Energy continues to benefit from artificial intelligence ("AI")-driven demand for electricity. This positions the company well in a market that is increasingly reliant on AI technologies, suggesting a strong growth trajectory. The Fund's investment in NRG Energy reflects confidence in its ability to capitalize on this trend, as evidenced by its performance relative to peers in the Utilities sector.

NRG Energy continues to benefit from artificial intelligence ("AI")-driven demand for electricity. This trend positions the company favorably as the demand for power increases with the use of AI. The strong performance of NRG Energy, alongside other utility holdings, indicates its resilience and potential for growth in a changing market environment.

NRG Energy continues to benefit from artificial intelligence ("AI")-driven demand for electricity. This trend positions the company favorably as the demand for power increases with the use of AI. The strong performance of NRG Energy, alongside other utility holdings, indicates its resilience and growth potential in the current market environment.