It’s a green day on the Street, as various M&A news and earnings announcements have improved overall market sentiment.
Among the stocks making headlines this Thursday are NXP Semiconductors NV (NASDAQ:NXPI), QUALCOMM, Inc. (NASDAQ:QCOM), Amazon.com, Inc. (NASDAQ:AMZN), Apple Inc. (NASDAQ:AAPL), and General Electric Company (NYSE:GE). Let’s analyze why each stock is trending and see how some of the world’s most successful investors have been trading these stocks recently.
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It’s official. QUALCOMM, Inc. (NASDAQ:QCOM) has agreed to buy NXP Semiconductors NV (NASDAQ:NXPI) for $110 in cash per share, good for a total value of $47 billion when including debt. Together, the two companies expect to have revenue of over $30 billion annually, and to complement each other in strategically-important areas such as mobile, automotive, IoT, and Security. Qualcomm’s management estimates that the merger will generate $500 million of annualized run-rate cost synergies within two years after the two officially combine, and be “significantly accretive” to adjusted EPS immediately upon closing. Qualcomm shares are up by just under 4% in morning trading, as investors thought the company might have to pay close to $120 per share to seal the deal. NXPI shares are also in the green in extended-market trading due to merger arbitrage traders buying.
Of the 749 hedge funds that we track which filed 13Fs for the June quarter, 57 were long NXP Semiconductors NV (NASDAQ:NXPI) at the end of June, while 48 were shareholders of QUALCOMM, Inc. (NASDAQ:QCOM).
Amazon.com, Inc. (NASDAQ:AMZN) is in the spotlight after Business Insider published a report stating that the e-commerce giant’s internal documents show that the company is planning to open as many as 2,000 compact grocery stores over the next ten years. According to the article, Amazon will initially take its time and test the market, opening just 20 stores by the end of 2018. The stores will be based in busy cities such as New York, Las Vegas, and Seattle, and will have different formats. Ten will be drive-up stores for Amazon customers to pick up the grocery purchases they made online. The other ten will sport a conventional grocery store design. Given that the grocery sector is an $800 billion-per-year market, Amazon could ramp up the number of stores it operates quickly if demand is strong. Ken Fisher‘s Fisher Asset Management inched its stake in Amazon.com, Inc. (NASDAQ:AMZN) lower by 1% in the third quarter, to 1.98 million shares at the end of September.
On the next page we’ll find out why traders are talking about Apple and General Electric this morning.