Here’s Why Traders Are Buzzing About These Five Stocks Today

With the S&P 500 near all time highs again, traders are in an optimistic mood despite the prospect of a Federal Reserve rate hike during the next FOMC meeting in June. The S&P and the NASDAQ are well in the green, and five stocks: Great Plains Energy Incorporated (NYSE:GXP), Westar Energy Inc (NYSE:WR), Allergan plc Ordinary Shares (NYSE:AGN), Williams Companies Inc (NYSE:WMB), and Energy Transfer Equity LP (NYSE:ETE) are buzzing more than others today. Let’s take a closer look and analyze how smart money investors are positioned towards each stock.

While there are many metrics that investors can assess in the investment process, the hedge fund sentiment is something that is often overlooked. However, hedge funds and other institutional investors allocate significant resources while making their bets and their long-term focus makes them the perfect investors to emulate. This is supported by our research, which determined that following the small-cap stocks that hedge funds are collectively bullish on can help a smaller investor to beat the S&P 500 by around 95 basis points per month (see the details here).

Great Plains Energy To Acquire Westar Energy 

Great Plains Energy Incorporated (NYSE:GXP) is 4.5% lower and Westar Energy Inc (NYSE:WR) is 7.6% higher after Great Plains Energy Incorporated (NYSE:GXP) announced it will acquire Westar Energy Inc (NYSE:WR) for $51 in cash and $9 in stock per share for each share of Westar Energy. The enterprise value of the deal is around $12.2 billion and Great Plains Energy’s CEO Terry Bassham will be the CEO and Chairman of the combined company. Once the deal closes, Great Plains Energy will have more than 1.5 million customers in Missouri and Kansas, around 13,000 megawatts of generation capacity, approximately 10,000 miles of transmission lines and over 51,000 miles of distribution lines. Moreover, more than 45 percent of the combined utility’s retail customer demand can be met with environmentally friendly emission free energy. Great Plains Energy has a solid track record of successfully integrating electric utilities, and bulls hope the Westar Energy acquisition will be no different. A total of 20 funds from our database, including Jim Simons’ Renaissance Technologies, owned shares of Great Plains while 22 funds held stakes in Westar Energy at the end of March.

On the next page, we examine Allergan plc Ordinary Shares, Williams Companies Inc, and Energy Transfer Equity LP.
Savvy Investor Establishes a Stake in Allergan

Allergan plc Ordinary Shares (NYSE:AGN)’s stock has inched up today after billionaire activist investor Carl Icahn issued a statement on his website that his fund acquired a big stake in the drug maker due in part to the CEO, Brent Saunders. Several years ago, Icahn played a part in bringing Mr. Saunders on board as the CEO of Forest Labs, where Mr. Saunders successfully unlocked enormous shareholder value by selling the company to Actavis in less than a year. Actavis later merged with Allergan and now Brent Saunders is the head of Allergan plc Ordinary Shares (NYSE:AGN). If Mr. Saunders can work his magic again, many Allergan shareholders will no doubt be very happy. Allergan was somewhat of a consensus pick among the smart money in the first quarter. Of the 766 total funds in Insider Monkey’s database, 170 funds owned $20.11 billion of Allergan plc Ordinary Shares (NYSE:AGN) shares and accounted for 19.00% of the float on March 31.

Williams Companies Might Consider Amended Offer

Williams Companies Inc (NYSE:WMB) is doing all it can to save the merger with Energy Transfer Equity LP (NYSE:ETE). According to Reuters, the company told Energy Transfer that it is open to considering an amended offer that would replace the $6 billion cash part of the merger with shares of an acquisition vehicle instead. Energy Transfer has wanted to get out of the merger due to the havoc that the deal and the low energy prices have wrought on its stock price. Overall, 52 funds tracked by Insider Monkey owned shares Williams Companies Inc (NYSE:WMB) while 31 funds were long Energy Transfer Equity LP (NYSE:ETE) at the end of the first quarter.

Disclosure: none