However, it definitely indicates that, on a purely historical basis, NRG Energy looks expensive. A high P/E isn't always a bad sign, since the company's growth prospects may also be increasing alongside the market's valuation. NRG Energy's P/E is higher than its five-year average, which could indicate the stock is overvalued. I've also included a few other businesses in the same or related industries: For historical context, let's compare NRG Energy's recent price to its 52-week and five-year highs. The market may be missing the critical element of your NRG Energy investing thesis. Short-term underperformance alone is not a sell sign. Investors in NRG Energy are no doubt disappointed with their returns, but is now the time to cut and run? Not necessarily. Let's get started!ĭon't sell on price Over the past 12 months, NRG Energy has risen 6.4% versus an S&P 500 return of 13.7%. Today I'm laser-focused on NRG Energy, ready to evaluate its price, valuation, margins, and liquidity. Now, I want to help you identify potential sell signs on popular stocks within our 4-million-strong community. This warning has helped my own personal investing throughout the Great Recession. In 2004, longtime Fool Bill Mann called confirmation bias one of the most dangerous components of investing. If you fall in love with your stock holdings, you risk becoming vulnerable to confirmation bias - listening only to information that supports your theories, and rejecting any contradictions. The decision to sell a stock you've researched and followed for months or years is never easy. Should you sell NRG Energy (NYSE: NRG) today?