M&A Smorgasbord for NextEra, Plus Earnings Results from Exxon, AbbVie, 2 Other Companies

The Nasdaq and all other major indexes are in the red this morning despite tech heavyweights Amazon.com, Inc. (NASDAQ:AMZN) and Alphabet Inc (NASDAQ:GOOG) reporting strong results since yesterday’s market close. Meanwhile, shares of NextEra Energy Inc (NYSE:NEE), Exxon Mobil Corporation (NYSE:XOM), AbbVie Inc (NYSE:ABBV), Town Sports International Holdings, Inc. (NASDAQ:CLUB), and Cypress Semiconductor Corporation (NASDAQ:CY) are each trending on earnings and M&A news. Let’s take a closer look at why the five stocks are in the spotlight and see how the best hedge funds in the world have been trading each stock.

At Insider Monkey, we track over 765 hedge funds, whose quarterly 13F filings we analyze and determine their collective sentiment towards several thousand stocks. However, our research has shown that the best strategy is to follow hedge funds into their small-cap picks. This approach can allow monthly returns of nearly 95 basis points above the market, as we determined through extensive backtests covering the period between 1999 and 2012 (see the details here).

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NextEra Engages in a Little M&A

NextEra Energy Inc (NYSE:NEE) is in the spotlight after making several M&A moves today. Firstly, the company agreed to sell its gas generating assets in Pennsylvania to Starwood Energy for total consideration of $760 million and net proceeds of $255 million after the repayment of existing project-related financing. That transaction is expected to close in the fourth quarter. Secondly, NextEra agreed to acquire Energy Future Holdings’ 80% indirect interest in Oncor Electric Delivery in a deal that implies a total enterprise value of around $18.4 billion. NextEra expects the deal to be accretive and to help the company grow adjusted EPS at or near the top-end of its previously announced 6-to-8% growth through 2018, using 2014 as a base. Jim Simons‘ Renaissance Technologies raised its stake in NextEra Energy Inc (NYSE:NEE) by 61% to more than 1.1 million shares during the first quarter.

Exxon Mobil Misses the Mark

Exxon Mobil Corporation (NYSE:XOM) shares are off by almost 3% today after the oil giant reported second quarter earnings of $0.41 per share on revenue of $57.7 billion. Analysts were expecting $0.23 per share and $2.53 billion more, respectively. Upstream earnings clocked in at $294 million for the period, while Exxon’s chemical earnings saved the day by adding $1.2 billion to its bottom-line. Exxon’s downstream earnings amounted to $825 million, off by $681 million from the second quarter of 2015 due to weaker refining margins. 60 funds tracked by Insider Monkey had long positions in Exxon Mobil Corporation (NYSE:XOM) at the end of the first quarter, down by eight funds from the end of the fourth quarter of 2015.

On the next page we examine how AbbVie, Town Sports International Holdings, and Cypress Semiconductor performed during their latest quarters.