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Tuesday Trading Taking A Bite Out Of Large-Cap Stocks Freeport-McMoRan Inc (FCX), Citigroup Inc (C), And Yahoo! Inc. (YHOO)

The shares of Freeport-McMoRan Inc (NYSE:FCX), Citigroup Inc (NYSE:C), and Yahoo! Inc. (NASDAQ:YHOO) started the day on a bad note. Shares of Freeport-McMoRan Inc (NYSE:FCX) have declined by 4.26% as of the time of publishing, while the shares of Citigroup Inc (NYSE:C) were down by 2.21%. Yahoo! Inc. (NASDAQ:YHOO) was also suffering alongside Alibaba Group Holding Ltd (NYSE:BABA)‘s dip, dropping by 1.42%. Alibaba’s afternoon rebound from its all-time low has helped likewise bouy Yahoo’s shares in the afternoon, as they were down by nearly 4% earlier in the day.

Yahoo! Inc. (NASDAQ:YHOO), Yahoo flag, Sign, Pride Parade, logo, march, Human Rights,

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At Insider Monkey, we track hedge funds’ moves in order to identify actionable patterns and profit from them. Our research has shown that hedge funds’ large-cap stock picks historically delivered a monthly alpha of six basis points, though these stocks underperformed the S&P 500 Total Return Index by an average of seven basis points per month between 1999 and 2012. On the other hand, the 15 most popular small-cap stocks among hedge funds outperformed the S&P 500 Index by an average of 95 basis points per month (read the details here). Since the official launch of our small-cap strategy in August 2012, it has performed just as predicted, returning over 135% and beating the market by more than 80 percentage points. We believe the data is clear: investors will be better off by focusing on small-cap stocks utilizing hedge fund expertise rather than large-cap stocks.

Let’s start with Yahoo! Inc. (NASDAQ:YHOO) which had ridden in the back seat of Alibaba’s share price rollercoaster, as the decline in the shares of the Chinese e-commerce company have weighed on Yahoo, which still holds a 15% stake in the it. The shares of the e-commerce company have rebounded a bit since their morning lows of $76.55 and are trading at $79.49 as of publishing. The weakness in the Chinese stock market is nonetheless a reason to worry for all major markets, as the local government’s efforts are falling short of being effective at stemming the tide. Yahoo! Inc. (NASDAQ:YHOO) was able to attract 104 hedge fund investors at the end of the first quarter, compared to 99 investors which held stakes in the company three months prior. However, the aggregate holdings of the hedge fund managers fell to $6.48 billion from $7.59 billion between those two periods. David E. Shaw’s D E Shaw held a large position in Yahoo at the end of the first quarter, with ownership of 12.43 million shares valued at $552.52 million.

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