NRG Energy Inc. (NRG)

[OilStockReport]

Warren Buffett sold, will you?

NRG Energy (NRG): Buffett sold all of his stake in this company by selling 6 million shares at an average price of $21.84 in Q3 2010.

In 2010, revenues shrunk by 1.15% to $8.84 billion, and GAAP EPS collapsed by 46.51% to $1.84. The profit margin also worsened to 31.37% from 40.54%. The next earnings release is on May 5. For the first quarter 2011, analysts estimate NRG will earn $0.15 per share, a decrease of 31.84% over the prior year first quarter results. For the first quarter 2011, analysts estimate NRG will generate revenues of $2.1 billion, a decrease of 6.84% over the prior year first quarter results. The company also has a debt to equity ratio of 1.25.

We estimate a low single digit decline in revenues for 2011 due to continued pressure on power prices. Also, the continued development of the Marcellus shale will keep downward pressure on natural gas prices, which in turn hurts peak power prices. For good reason, NRG shares trade well above our fair value estimates. This is a loser, folks. Buy solar or oil company stocks, instead.

NRG Energy is Fortune 500 and S&P 500 Index company that owns and operates one of the country’s largest and most diverse power generation portfolios. Headquartered in Princeton, NJ, the company’s power plants provide 25,000 MW of generation capacity, which is enough to supply nearly 20 million homes. NRG’s retail businesses, Reliant Energy and Green Mountain Energy Company, combined serve more than 1.8 million residential, business, commercial and industrial customers. With investments in solar, wind and nuclear power, as well as electric vehicle infrastructure, NRG is working to help America transition to a clean energy economy.