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Five Cheap Stocks Hedge Funds Are Bullish On

Office Depot Inc (NASDAQ:ODP) also saw the number of funds with long positions decline during the last three months of 2015. At the end of December, 46 funds from our database owned shares of the $2.90 billion office products supplier, versus 47 funds a quarter earlier. Consequently, the aggregate value of their holdings fell to $627.20 million from $964.83 million and represented 20.30% of the company. Over the last year, Office Depot’s stock has slid by more than 43%. Among the funds that cut their exposure to Office Depot Inc (NASDAQ:ODP) is Jeff Smith’s Starboard Value, which unloaded 89% of its stake to 4.48 million shares during the October-December period. Moreover, earlier this month, Starboard revealed in a filing that it holds 25.0 million shares underlying ‘Call’ options and Jeff Smith owns directly 45,836 shares. Starboard’s move is interesting, since the fund pushed for the merger of Office Depot Inc (NASDAQ:ODP) with Staples. The merger had been expected to be completed by February 4, but in January both companies decided to extend the date to May 16 in order to clear all hurdles and to finish an antitrust litigation with the Federal Trade Commission.

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Rite Aid Corporation (NYSE:RAD) is the only stock in this list, in which the number of funds with long positions went up during the last quarter of 2015, although just by one. As of the end of December, 47 funds among those we track held shares with a total value of $1.23 billion, versus $1.0 billion a quarter earlier. In this way, these funds held 15% of Rite Aid Corporation (NYSE:RAD) at the end of last year. The increase in popularity came amid Walgreens Boots Alliance Inc (NASDAQ:WBA)’s proposal to acquire Rite Aid in a $17.2 billion deal. The combined company will be the largest drugstore chain in the US with around 13,000 stores across the country. Last month, shareholders of Rite Aid voted in favor of the deal and it still has to clear regulatory hurdles. Among the funds we track, the largest shareholder of Rite Aid Corporation (NYSE:RAD) is Nick Niell’s Arrowgrass Capital Partners, which initiated a stake containing 30.26 million shares during the fourth quarter.

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