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Buyout Offers, Asset Sales, and Regulatory Scrutiny, Oh My! Why These 5 Stocks Are in the Spotlight on Monday

After opening in the red, the S&P 500, Dow Jones, and NASDAQ have each moved into the green as investors become more optimistic about the American economy. Among the stocks in the spotlight today are Yahoo! Inc. (NASDAQ:YHOO), General Motors Company (NYSE:GM), Ford Motor Company (NYSE:F), Alphabet Inc (NASDAQ:GOOGL), and Autohome Inc (ADR) (NYSE:ATHM). Let’s take a closer look at why these stocks are receiving attention and examine what top hedge funds think of each stock.

At Insider Monkey, we track around 785 hedge funds and institutional investors. Through extensive backtests, we have determined that imitating some of the stocks that these investors are collectively bullish on, can help retail investors generate double digits of alpha per year. The key is to focus on the small-cap picks of these funds, which are usually less followed by the broader market and allow for larger price inefficiencies (see the details here).

Verizon among the top suitors for Yahoo’s core assets

With the deadline for preliminary bids for Yahoo! Inc. (NASDAQ:YHOO)‘s core assets ending tonight, the Wall Street Journal reports Verizon Communications Inc. (NYSE:VZ) is likely the top suitor for Yahoo’s operational businesses. Verizon acquired AOL last year for around $4.4 billion and could realize substantial synergies between Yahoo and AOL. Other firms in the bidding include private equity firms such as TPG, Bain Capital, and Advent International. Analysts expect the sale of Yahoo’s core assets to bring in between $4 billion and $8 billion. 84 elite funds in our system held shares of Yahoo! Inc. (NASDAQ:YHOO) at the end of December,  down from 89 funds at the end of September. Christian Leone‘s Luxor Capital Group owned 11.46 million Yahoo shares at the end of 2015.

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GM and Ford get the Barron’s Lift

General Motors Company (NYSE:GM) and Ford Motor Company (NYSE:F) are beneficiaries of the Barron’s Lift today, as both stocks are 1.8% in the green in late morning trading after the financial magazine published a positive column on the two vehicle manufacturers this weekend. In the article, Barron’s writer Richard Rescigno wrote that General Motors Company (NYSE:GM) and Ford Motor Company (NYSE:F) are both cheap, with General Motors trading for just 5.6-times expected net profit for the year and Ford trading for 6.6-times 2016 earnings estimates. Rescigno notes that both companies are “leaner, nimbler, and more disciplined than they have been in decades” and pay generous dividends. Due to various factors, Rescigno thinks auto sales could be better-than-expected in the near-future, and that General Motors and Ford each have 25% upside. Warren Buffett‘s Berkshire Hathaway owned 50 million shares of General Motors on December 31, while Richard S. Pzena‘s Pzena Investment Management owned 18.29 million shares of Ford.

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On the next page, we examine why Alphabet Inc and Autohome Inc are in the news today.

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