Five Cheap Stocks Hedge Funds Are Bullish On

#2 Rite Aid Corporation (NYSE:RAD)

– Investors with Long Positions (as of March 31): 52

– Aggregate value of investors’ holding (as of March 31): $960.22 million

Moving on, the number of hedge funds tracked by Insider Monkey that have long positions in Rite Aid Corporation (NYSE:RAD) increased by five during the first quarter. However, despite a 4%  rise  in Rite Aid Corporation (NYSE:RAD)’s stock during the same period, the aggregate value of hedge funds’ holdings in the company fell by $266 million. Rite Aid Corporation (NYSE:RAD)’s stock took a hit last month as the company awaits regulatory approval for its $17.2 billion merger with Walgreens Boots Alliance Inc. (NASDAQ:WBA). Speculations are rife regarding why the stock has fallen so much and increased its merger arbitrage spread by more than 15%. While some analysts believe it’s because investors are fearing that  regulators will block this merger just like they have blocked several other mergers in the past few months, others think that it’s a result of large institutional investors selling Rite Aid Corporation’s stock in droves. Nancy Havens-Hasty‘s Havens Advisors upped its stake in Rite Aid Corporation by 143% to almsot 1.65 million shares during the first quarter.

#1 Office Depot Inc (NASDAQ:ODP)

– Investors with Long Positions (as of March 31): 58

– Aggregate value of investors’ holding (as of March 31): $1 billion

While hedge funds are generally great at picking stocks and generating outsized returns, they are not infallible. This is the learning  that one comes across when looking at Office Depot Inc (NASDAQ:ODP)’s popularity among hedge funds during the first quarter and the performance of its stock during the current quarter. The ownership of the company among hedge funds covered by us saw a an increase of 26% and the aggregate value of their holdings in it swelled by over 60% during the first quarter. However, after Office Depot Inc (NASDAQ:ODP) announced the termination of its merger with Staples its stock has fallen dramatically, erasing the 26% in gains it made during the first quarter and losing more than one-third of its value so far this year. On May 17, the company revealed its future strategy in the wake of the termination of its merger with Staples, which includes making additional acquisitions and increasing its presence in the markets for break room and cleaning supplies as well as selling some of its European assets. Simon Davies‘ Sand Grove Capital Partners initiated a stake in Office Depot Inc during the first quarter by purchasing 765,500 shares.

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