Starboard Value also entered a new position in Alibaba Group Holding Ltd (NYSE:BABA) during the fourth quarter, which amounted to 400,000 shares, valued at roughly $41.58 million. Despite the hedge fund’s bullish stance, the stock lost 19.92% in the first three months of 2015 and is currently trading at $81.86 per share. Despite its poor performance, numerous investment firms boast a stake in Alibaba Group Holding Ltd (NYSE:BABA), including Dan Loeb’s Third Point and Rob Citrone’s Discovery Capital Management.
Lastly, AOL, Inc. (NYSE:AOL) was also among Starboard Value’s worst-performing picks, as the stock lost 14.21% during the first quarter. The hedge fund’s stake in the company amounts to 225,000 shares, which were valued at around $10.4 million at the beginning of the year. As mentioned above, Starboard Value had been pushing Yahoo! and AOL towards a merger, which it felt would increase the value of its holdings in both companies. However Smith and Starboard have since backed off in their quest to have the two internet pioneers merge. In contrast to the small stake in AOL, Inc. (NYSE:AOL) held by Mr. Smith’s firm, David Cohen and Harold Levy’s Iridian Asset Management own 5.07 million shares of the company’s stock.
Tracking the activity of hedge funds such as Starboard Value is vital when trying to seek out new investment opportunities for small investors. However, simply imitating the moves made by these firms does not guarantee great returns, since most of their top picks are in large-cap stocks. These equities usually don’t beat the market by a large margin, as they are usually more efficiently priced. Hence, here at Insider Monkey, we concentrate our efforts on gathering and analyzing information regarding the small-cap picks of more than 700 hedge funds. As a result we have devised a small-cap strategy that returned over 137% over the past 2.5 years, and beat the S&P 500 ETF (SPY) by more than 80 percentage points.