Alphabet Buys Apigee, Plus The Latest On Verint, Barnes & Noble, and Energous

It’s a hectic day on Wall Street, as several mergers have been announced, in addition to a bullish EIA report that showed falling oil inventory, plus the announcement that the European Central Bank will leave interest rates unchanged.

In this article we’ll cover one of those merger announcements, between Apigee Corp (NASDAQ:APIC) and Alphabet Inc (NASDAQ:GOOGL), as well as take a look at three other stocks that are on the move today in Verint Systems Inc. (NASDAQ:VRNT), Barnes & Noble, Inc. (NYSE:BKS), and Energous Corp (NASDAQ:WATT). We’ll also see how successful hedge funds have been trading these stocks lately.

Through extensive research that covered the portfolios of several hundred large investors between 1999 and 2012, we determined that following the small-cap stocks that large money managers are collectively bullish on, can generate monthly returns nearly 1.0 percentage points above the market (see the details here).

Let’s start with Energous Corp (NASDAQ:WATT), which has slid by 10% today after sinking by nearly 11% yesterday. After a massive run-up through September 6 that saw its shares more than double this year in the wake of speculation that Energous’ wireless charging technology could be used by Apple Inc. (NASDAQ:AAPL) for its iPhone 7, shares have been hit with icy reality in the wake of Apple’s iPhone 7 reveal, as that speculation proved to be erroneous. Without the monster Apple announcement that some stock pitchers were claiming would send Energous shares through the roof, the company is left a wireless products arsenal that has two yet-to-be-approved products that won’t be released until at least 2017. Energous Corp (NASDAQ:WATT) was held by just two of the hedge funds in our database on June 30, down from four a quarter earlier.

Barnes & Noble, Inc. (NYSE:BKS) is 2.83% in the red today, clawing its way back from a deeper loss this morning following the release of the bookseller’s first quarter results for its 2017 fiscal year. For the quarter ended July 30, B&K’s loss narrowed to $0.20 per share, a big improvement over the $0.69 that it lost for the same quarter of its previous fiscal year. However, sales slumped by 6.6% year-over-year, coming in at $913.9 million. B&K was also forced to cut its full fiscal year comparable-store sales guidance after a weak quarter on that front. Nook sales did not pick up any of the retail slack, crumbling by 24.5% to $41 million. David Abrams‘ Abrams Capital Management is a big believer in Barnes & Noble, Inc. (NYSE:BKS), owning 10.42 million shares of the company on June 30, which ranked it as the fund’s sixth-most valuable holding.

We’ll see what’s up with Verint Systems and Alphabet’s purchase of Apigee on the next page.

Verint Systems Inc. (NASDAQ:VRNT) shares have jumped by 8.48% today after the company reported strong earnings for its second quarter of fiscal 2017. EPS of $0.57 topped the consensus mark of $0.54, while revenue of $261.9 million missed the consensus target by $2.81 million. The strong stock performance is in spite of full-year earnings guidance of $2.85, which was $0.15 off the consensus estimate. With the announcement of a government cyber security contract worth as much as $200 million, investors may feel that Verint’s full-year guidance is overly safe. Shares are testing the high-end of their six-month range today at $38 and will face resistance around the $39 level. 21 hedge funds in our system owned 10.5% of Verint Systems Inc. (NASDAQ:VRNT)’s shares on June 30.

Lastly we come to Apigee Corp (NASDAQ:APIC) and Alphabet Inc (NASDAQ:GOOGL), the former of which will soon be a part of the latter’s holding company. Alphabet will buy the San Jose-based software company for $625 million, or $17.40 per share in cash, and Apigee’s shares have responded by jumping 6.52% to $17.41, a cent above the offer price. A leader in API management, Apigee’s shares sank to as low as $5.35 in early-February but have been on a steady uptrend ever since as it’s reached record billings and drastically cut its cash burn. The deal fortifies Alphabet Inc (NASDAQ:GOOGL)’s position in the cloud services sector, in which it’s engaged in a furiously evolving battle with several other tech giants.

Apigee Corp (NASDAQ:APIC) was in the portfolios of 12 of the funds in our database on June 30, up from nine a quarter earlier, while Google’s class A and C shares were held by a total of 187 different funds, making it the most popular stock among the funds that we track as of June 30.

Disclosure: None