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Stocks That Took A Nosedive Yesterday: Yelp Inc (YELP), Vipshop Holdings Ltd – ADR (VIPS), Weight Watchers International, Inc. (WTW)

Vipshop Holdings Ltd – ADR (NYSE:VIPS) is another company to have declined significantly in today’s trading session after the commencement of a class action lawsuit against the company in New York. According to the plaintiffs, shareholders who purchased the company’s shares between February 17, 2015 and March 18, 2015, will be eligible. Vipshop Holdings released misleading and inaccurate statements related to its business, operational, and compliance policies according to the lawsuit. It includes overstating sales, cash flows, profits and asset accounts, along with GAAP violations in its financial statements. If this class action lawsuit stands true and Vipshop Holdings Ltd – ADR (NYSE:VIPS) is found guilty, it could mean large penalties and a further drop in its share price. The shares of Vipshop have grown 4.18% year-to-date and smart money holds a positive outlook of the company. 48 hedge funds tracked by Insider Monkey made aggregate investments of $3.22 billion in the company at the end of the first quarter, against previous quarter holdings of $2.16 billion from 47 hedge fund managers. While the increase in capital is significant, shares of Vipshop were up by more than 50% during the first quarter, which accounts for the gains.

We don’t just track the latest news and moves of hedge funds. We are, in fact, more interested in their 13F filings, which we use to determine the top 15 small-cap stocks held by the funds we track. We gather and share this information based on 16 years of research, with backtests for the period between 1999 and 2012 and forward testing for the last 2.5 years. The results of our analysis show that these 15 most popular small-cap picks have a great potential to outperform the market, beating the S&P 500 Total Return Index by nearly one percentage point per month in backtests. Moreover, since the beginning of forward testing in August 2012, the strategy worked brilliantly, outperforming the market every year and returning 135%, which is more than 80 percentage points higher than the returns of the S&P 500 ETF (SPY) (see more details).

Disclosure: None

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