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Page 1: The Energy Company Fueling a 700% Gain - Amazon Web …€¦ · HEN renowned inventor Nikola Tesla designed the first alternating current ... The Energy Company Fueling a 700% Gain

The Energy Company Fueling a

700% Gain

Page 2: The Energy Company Fueling a 700% Gain - Amazon Web …€¦ · HEN renowned inventor Nikola Tesla designed the first alternating current ... The Energy Company Fueling a 700% Gain

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WHEN renowned inventor Nikola Tesla designed the first alternating current (AC) electricity supply system some 132 years ago, little did he know the extent to which his scientific breakthrough would revolutionize the world — not just once, but twice.

The first time was in the late 19th century when Tesla’s experiments with electricity led to the development of the electric light bulb. He also discovered the rotating magnetic field, which is the basis of most AC machinery and pioneered such game-changing breakthroughs as X-ray imaging, mechanical generators, and wireless communications. In fact, his 1891 invention, the “Tesla coil,” is still used in radio technology today.

Fast-forward to 2017, where the use of electricity has become an integral part of our daily lives — powering everything from our homes and factories, to our communication systems, personal devices and so much more. It is so prevalent that we’ve come to take it for granted, assuming it will always be there for us no matter how great the demand. Meanwhile, other sources of energy — renewable, nuclear, fossil — have lately overshadowed good, old-fashioned reliable electricity in the public consciousness.

But the critical role of this potent power source in modern technology is about to make a major comeback. The catalyst will be a big event taking place later this year — ironically by the company that has adopted Nikola Tesla’s last name — that will usher in a new era of electrical innovation.

In this report, you’ll discover the reasons why electricity is poised to play a pivotal role in the next industrial revolution. More important, however, I will reveal the company that is uniquely positioned to benefit significantly from this big event — and the mega trend it will trigger — creating a once-in-a-lifetime opportunity for you to realize a gain of up to 700% on your investment … long before everyone else gets wind of it and misses the boat entirely.

The Next “iPhone-like Moment”Up until 2007, electricity consumption in the United States had been consistently increasing. In fact,

since the time that electricity was harnessed for technological use in the late 1800s until the first decade of the 21st century, we produced and consumed more energy practically every year.

Then suddenly, in 2007, the trend began to reverse. We consumed less electricity in 2008, and again in 2009, and now we’re back to levels last seen in the 1990s, as shown on the chart below.

True M mentumPAUL MAMPILLY’S®

The Energy Company Fueling a 700% Gain

By Paul MampillyEditor, True Momentum

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Expert research suggests several reasons for the unusual decline, including:

• Greater regulation.

• Rising prices.

• Better use of existing resources.

• Rooftop power from solar panels.

• An undefined structural shift in our economy.

But now something is about to happen that is likely to change the trend and make electricity a hot commodity once more … a paradigm shift that will make the stock prices of certain electricity companies skyrocket.

That big event revolves around electric vehicles (EV). It’s an important development that is at the intersection of the two main mega trends that I track — the Internet of Things and the millennial generation.

The first electric, Internet-connected and self-driving car — Tesla’s Model 3 — is about to be released by year’s end. It’s the first time the American public will be exposed to a car that is everything that many people — especially millennials — want in a car today.

They want their cars to be nonpolluting and carbon-neutral. They want to be able to talk on their phones or multitask safely while they travel, so they want their cars to be self-driving. They want to be able to travel a relatively long distance without having to recharge. And, if that weren’t enough, they want the devices in their cars to be connected to the world through the Internet.

The Tesla Model 3 provides all that and more. The compact four-door sedan comfortably seats five adults, is designed to achieve a 5-star safety rating and has a range of 215 miles or more on a single charge. Its electric motor is markedly smaller than a gasoline- or diesel-burning engine capable of accelerating from zero to 60 in under six seconds. Like all electric cars, the Model 3’s interior will be silent and vibration-free. Tesla’s Autopilot electronic driving aids enable the vehicle to change lanes, read speed limit signs, navigate freeway off-ramps and brake if it detects that a collision is imminent. It also features a large, TV-like touchscreen on the dashboard that groups all of the car’s key functions into a single unit to reduce distraction. And considering all these features, the Tesla Model 3 has a reasonable starting price of $35,000 before incentives.

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I believe the launch of the Tesla Model 3 is going to be an “iPhone-like moment” for the auto industry — that moment when advanced technology takes a quantum leap forward and changes our lives for the better. How do l know the Model 3 will be a major success? Because it already is. It has nearly 400,000 preorders worth upward of $10 billion. As a matter of fact, I’m one of the people who preordered the Model 3. And that’s before the finished product has even been launched. Once it’s released, millions of people around the globe will realize that the old fuel-guzzling, mechanical car industry is on its way out.

EVs vs. Gas GuzzlersHow does an electric car beat driving a tradition gas-fueled automobile? Let me count the ways:

It’s cheaper to run: The average American spends $2,000 to $4,000 each year to fill up their gas tanks. Although electricity isn’t free, it’s a lot cheaper to charge an electric car than to fill up a fuel-based car. According to the U.S. Department of Energy, you can recharge an electric vehicle battery for as little as $2.64

It has zero emissions: An electrically powered engine doesn’t emit toxic gases, so it is 100% eco-friendly, contributing to a cleaner, healthier environment. It also runs quieter than a gas-fueled engine, thus reducing noise pollution.

It requires less maintenance: With an electric car, there is no need to lubricate the engine. Other costly engine work is unnecessary, so you don’t have to have the car serviced as often as a gasoline-powered car.

It’s cost-effective: With technological advancements — like the ones built into the Tesla Model 3 — along with the mass production of batteries and available tax credits, the cost and maintenance of electric vehicles have gone down significantly.

It can save you a lot of money: Electric car owners have reported positive savings of up to tens of thousands of dollars per year. Not only can these vehicles be fueled for very cheap prices, but electric powertrains require less costly maintenance and there are several federal, state and local incentive programs that help you recoup some of the purchase price for going green.

These are all contributing factors to the projected growth of the electric car industry, as evidenced by the chart below.

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And it’s not just the proliferation of electric vehicles that will greatly increase the demand for electricity in the years ahead…

Other Factors Are in PlayElectricity is one of the most important power sources in most industrial operations. Its use accounts for,

on average, 25% to 33% of overall industrial energy consumption. That’s because it’s used in a wide range of processes — such as automation, robotics and computer control — that are growing by leaps and bounds.

True, industrial production dropped 20% during the last recession (2008 to mid-2009) while the broader economy (gross domestic product, or GDP) declined by 5%. But now, U.S. manufacturers are moving into a more favorable competitive position thanks to a stronger economy and less regulation. As a result, manufacturing and industry in the U.S. are expected to grow a few points higher than GDP. And even if the efficiency gains only amount to 1.5% or 2% per year, it means greater industrial power demand for the foreseeable future.

Overall, the U.S. Energy Information Administration projects a 48% increase in world energy consumption by 2040. (See the chart below.)

However, there’s just one small problem with this rosy picture…

We Don’t Have Enough Power!Our electrical grid is not ready for us to shift from fueling our cars with gasoline to filling our cars with

electricity — much less meeting the growing power demands of manufacturers.

As noted earlier, between 2007 and 2016, our electricity generation capacity has gone down by nearly 2%. There are numerous reasons for the decline, but the biggest issue is regulation.

Research shows that it takes about five years from when an electricity plan is submitted and when developers can actually start building a power plant. That’s because every single thing about constructing an electrical plant is subject to permits, licenses and lawsuits.

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The bottom line is, just catching up to 2007 in power production will take five to seven years. And it is estimated that going beyond that level will take 10 to 15 years.

But therein lies an opportunity…

Between the coming demand for electric cars and the difficulty in increasing supply due to regulations and other issues, the companies that already produce clean energy are sitting on a jackpot that is going to pay off in spades soon.

And at the top of the list is an electricity company that has distinct advantages over its peers, creating a once-in-a-lifetime opportunity to grab massive gains…

The King of MegawattsNRG Energy Inc. (NYSE: NRG) is America’s leading integrated power company with the nation’s largest

and most diverse collection of power-generation facilities. Headquartered in both in West Windsor Park, New Jersey, and Houston, Texas, this S&P 500 component and Fortune 200 company has a fleet of nearly 100 power plants located in 18 states in the Northeast, the Chicago area, Gulf Coast, the Southwest, Nevada and California, with approximately 47,000 megawatts of total generation capacity. That’s enough to power about 40 million homes. All told, NRG’s retail power services provide electricity to nearly 3 million homes and businesses, mostly in Arizona and the Northeast.

Most of NRG Energy’s generation facilities are powered by natural gas, oil and coal. However, the portfolio also includes more than 30 utility-scale wind farms in 12 states and six solar farms in California, Arizona and New Mexico. In addition, the company owns 29 megawatts of solar-distributed generation. NRG also has a 44% ownership stake in South Texas Nuclear Generating Station. Some of NRG’s facilities use cogeneration, also known as combined heat and power, which involves the use of a heat engine or power station to generate electricity and useful heat at the same time.

Founded in 1992 as the wholesale arm of Xcel Energy, NRG was spun off in 2004 as part of a bankruptcy reorganization. Since then, NRG Energy has been steadily growing through acquisitions to become a $5 billion utility titan. When the state of Texas deregulated the electricity market in 2002, the former Houston Lighting & Power company was split into several companies including Texas Genco and Reliant Energy, which

SOURCE: SEC.gov

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NRG Energy bought in 2006 and 2009, respectively. As a result of these mergers, NRG now serves 1.6 million customers in Texas alone.

NRG then acquired Green Mountain Energy in 2010, becoming the largest retailer of green power in the United States and providing all its Green Mountain and many Reliant customers with energy from 100% renewable sources.

In 2012, NRG acquired GenOn Energy, then Energy Curtailment Specialists, a Buffalo-based demand response company in 2013, and most recently Goal Zero, a manufacturer of personal solar power products in 2014 — thus providing NRG with a significant presence in several key regions. (See chart above.)

NRG’s Green Energy InitiativesIn 2009, NRG Energy began an initiative to become a green energy producer by investing in various clean

energy projects. These included:

• Onshore and offshore wind power.

• Solar thermal energy.

• Photovoltaic panels and concentrated solar power.

• Distributing solar power facilities.

• Repowering traditional coal plants with biomass (organic material used as fuel).

Anticipating the growing needs of electric vehicle (EV) owners, NRG Energy also launched the EVgo network in 2010, the first completely private public electric vehicle charging stations. There are now more than 1,000 EVgo locations throughout the nation with more to come, which will provide a vital source of electricity once the self-driving Tesla 3 Model is launched and revolutionizes the automobile industry.

The NRG Energy AdvantageNRG is well-positioned to benefit from the imminent surge in electricity prices due to increased demand, as

well as from key competitive advantages:

Growing market share — NRG increased its market share in its business segment to approximately 7.55% in the first quarter of 2017 — which is not surprising. Having power plants in multiple regions of the country is a major competitive advantage for NRG. It has enabled the company to establish strong relationships with its corporate and residential customers, providing leverage for signing long-term power purchase agreements for NRG’s renewable energy projects.

Enhanced access to financing — NRG’s large balance sheet and strong liquidity enables the company to access capital markets for project debt, equity and tax equity. This also gives the company a competitive edge in the renewable energy market over pure-play solar and wind companies.

The abundance of affordable natural gas — With its gas-fired fleet, NRG benefits from America’s abundant and affordable supply of natural gas. The shale revolution, which created a glut of supply on the market, has driven down the price of natural gas, and as a result, NRG can produce lower-cost electricity from its gas-fired generators. And with the now-abundant supply of domestic natural gas on the market, NRG is well-positioned to deliver lower-cost electricity well into the future.

Greater immunity from environmental regulations — NRG is less subject to environmental liabilities and issues than many of its competitors because of its commitment to clean energy. It emits fewer greenhouse gas emissions than many of its peers, which positions it well against stricter federal and state environmental laws.

Increasingly eco-friendly operations — The fuel efficiency and advanced emissions controls of NRG’s

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natural gas plants result in dramatically lower greenhouse gas-, smog- and acid-rain producing emissions than coal and other typical fossil-fueled power plants.

A Rare Profit OpportunityThe good news is that Wall Street, the media and the technical traders have yet to realize the opportunity

NRG Energy is presenting on a silver platter to the average investor — an opportunity that is strikingly similar to another that resulted in a gain of 738% for me just last year. Here’s why…

Just a few short months ago, NRG Energy was arguably one of the least favorite of most analysts… despite being a Fortune 200 stock and one of the largest players in the energy market.

Earlier this year, the stock was downgraded by Morgan Stanley.

The Street rated it a C minus.

Bollinger Band considered it a “high risk.”

The Relative Strength Indicator showed the stock at a weak 58.

It was below its 50-day moving average.

And the technicals were unimpressive, at best.

And then, there’s the matter of NRG’s debt of $17 billion as of October 2017.

Why so much? Because this is a business where you have to put up the electricity plant before you have a single customer. It’s only after you construct a plant and get it working that you can start producing electricity safely and supply that power into the grid.

In other words, any company in the business of generating electricity is going to be using a lot of debt, and NRG is no exception to that. The fastest way to do this is to borrow money. And right now — because interest rates are low — it’s also the cheapest way for NRG to do this.

There’s no getting around the fact that this much debt would pose a problem, especially if you believe that NRG’s plants are not going to be running full tilt soon. However, as you know, I believe that NRG’s power plants are going to be running in overdrive soon … because of electric cars.

Just so you understand, NRG is not desperate for cash right now. As of October 2017, it reported having $752 million in cash. Beyond that, on an operating cash flow basis (which is the best way to see if a business is doing well), the company generated $1.34 billion in cash flow over the last 12 months. In terms of profitability, the gold standard is free cash flow. And on that basis as well, NRG is positive, generating $1.27 billion over the last 12 months. Also, seeing NRG generate enough cash is important because it does pay out about $1 billion in interest per year.

Now, when we put this together what you have is a company that has lots of debt and good cash flow while its business conditions are poor. This is why NRG stock is down from its peak of $35 in 2014. However, I believe it’s becoming clear to the smart money in the market that all of NRG’s power plants are undervalued by a massive amount. Here’s why I say this...

It’s because while we were compiling this report, a news story came out saying that Calpine — which is a company with a business profile that’s nearly identical to NRG — is getting ready to be acquired by a private equity firm. Private equity buyers in my experience are among the shrewdest, most calculating and clever buyers of companies … timing their buys just as they hit bottom. I believe that private equity looking to buy Calpine is THE signal that they understand what I’ve told you in this report … and they are trying to steal Calpine from its shareholders cheaply before it soars higher because of the electricity shortage that’s coming from the impending huge demand for electric cars.

This is why NOW is the time to get in and buy NRG.

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I know … the current consensus among analysts is that NRG is an unworthy investment. But that assessment is typically shortsighted and will undoubtedly change once the stock starts to take off like a rocket. Only by then, it’ll be too late for the “patient investor” to take advantage of this rare opportunity.

You see, the mistake many investors make is that they wait until the technicals improve and analysts finally acknowledge an upward trend and issue a “buy” rating. However, by then the proverbial train has left the station and your chances of scoring huge profits are slim to none.

Your goal as a successful investor is to identify and profit from stocks that have what I call True Momentum. Unlike “regular” momentum in which investors go for quick 10% to 25% gains, the goal of True Momentum is to zero in on a special category of companies that are on an accelerated upward path. Basically, True Momentum stocks are those that have nowhere to go but up or are already going up … but still have many miles of profit ahead.

I’ve spent my entire 25-year career in finance honing my ability to spot stocks with True Momentum … with billions of dollars to test and refine my methodology. It has become my bread-and-butter money-making technique … a strategy that has allowed me to pull triple-digit winners out of the market year in, year out, without fail.

My True Momentum strategy is the main reason why my personal account grew 305% last year … 23 times more than the market.

Based on all my research, NRG Energy has True Momentum. I’ve screened it dozens of times; I’ve done the homework; I’ve talked to my contacts … this company is going to surge. And right now is the time to get in … before the rest of the world knows how profitable this company will soon become.

Lightning About to Strike AgainThe situation with NRG Energy is almost identical to another True Momentum stock I targeted last year,

Coeur Mining, which played out exactly as I predicted … going up 100% within just a few weeks and unleashing peak gains of 738% within seven months.

It was a little-known “down and out” company that mined gold and silver but ran into some problems when the precious metals market tanked. It was trading for about $30 a few years ago … but I bought it on January 15 for $1.88 … because I knew things were about to change. The stock price immediately took off. By August, just seven months later, Coeur Mining had rallied to $15.77 — a 738% gain.

It’s not the biggest gain I’ve ever made — like the time I made 2,539% in Sarepta Therapeutics, turning every $10,000 I invested into over $250,000.

Nor did this investment make the fastest profit, like the time I made 208% on Pharmacyclics in just four days, or the time I made 634% on Netflix in just three months. However, my investment in Coeur Mining is a perfect example of the immense profits you can achieve by finding stocks with True Momentum.

Let me illustrate the meaning of True Momentum by digging a little deeper into my Coeur Mining trade…

When I invested in January, Wall Street was punishing precious metals. Gold was trading at $1,050 … about 40% below its high of $1,800.

And the media were quick to call gold a horrible investment. Bloomberg compared investing in gold to a “foolish” move. The Wall Street Journal called gold a “pet rock.” Time bluntly said: “Buying gold is a fool’s game.”

As you would expect, as gold sank to a multiyear low, gold stocks took a beating … and Coeur Mining was no exception. It was down 70%.

And, again, the media were there to point out Coeur’s apparent weaknesses. One article called Coeur Mining “debt-ridden and overvalued.” Moody’s, the rating agency, placed the company on review for a

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downgrade. The technical indicators were a nightmare. The Relative Strength Indicator showed the stock was doomed … dipping below 30. The stock was way below its 50-day moving average. The Bollinger Bands were screaming “SELL!” And the MACD confirmed that the stock was doomed.

In sum, every technical indicator said Coeur Mining was a hopeless investment. Yet, I ignored Wall Street, I ignored the media and I ignored the technical indicators … and bought Coeur Mining with both hands on January 15. As mentioned, I paid a mere $1.88 a share.

From Wall Street’s and the media’s perspective, I might as well have flushed my money down the toilet. Yet, in February, to the surprise of everyone but me, Coeur Mining’s stock price started moving up.

Suddenly, it became a “buy” according to the Bollinger Bands … then it broke through its 50-day moving average and got a green light from both the MACD and Relative Strength Indicator … confirming the stock had momentum.

So, if I had waited for the technical indicators to confirm the move, I would have gotten in at $5.50 … and missed out on over 290% in gains.

But if I had waited for the Wall Street experts to confirm the investment, I would have missed out on ALL the gains. Take a look…

RBC Capital Markets upgraded Coeur Mining to “outperform” … in July.

And remember how Moody’s put the company on their downgrade list … well, they actually gave Coeur Mining an upgrade … in September. During the same month, Bloomberg rated Coeur Mining as the second best-performing stock worldwide.

But by then … Coeur was losing steam and spiraling out of control … ultimately falling 39% from its high in August.

Yet I had already seen my personal stake soar to a peak of 738%.

My point is, if I had waited for Wall Street and the media to tell me to buy, I would have actually lost money. And if I were a technical investor, I would have missed out on nearly half my gains.

Supercharge Your Portfolio With NRG EnergyNRG Energy is poised to repeat the same story. I’ve been thoroughly analyzing the energy market because

I’ve noticed the same behavior I witnessed just a year ago in gold and silver. And, make no mistake about it, this is a rare, major profit opportunity.

An opportunity that is at the epicenter of two massive trends converging … creating a financial tsunami worth upward of $20.4 trillion.

Action to take: Buy shares of NRG Energy Inc. (NYSE: NRG).

Note: When I first told readers about NRG Energy in May of 2017, it was trading at $15.24. The stock has since moved higher than my entry price. However, because I believe that NRG Energy could hand early investors gains of 300%, it's still a great buy. That means you can still add it to your portfolio if you're comfortable paying more than my buy-in price. Just know that your results may vary from mine depending on what you pay for your shares.

All my research has confirmed that NRG Energy’s stock price is poised for a major upswing … and now is the absolute best buying moment before things accelerate exponentially.

Of course, you can wait for the technical story to improve … and miss about half the potential gains.

Or you can wait for the media and Wall Street to give the company a “buy rating” and miss all the gains.

Or you can jump in, right now, before the rest of world knows how profitable the company will become.

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The choice is yours.

Meanwhile, I will be tracking NRG Energy’s progress closely and will update you on what’s happening through regular updates in True Momentum.

Regards,

Paul MampillyEditor, True Momentum

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