After the long weekend, markets look for their eighth consecutive week of gains. Earnings report will continue to make headlines, but M&A activity is starting to pick up. Over the weekend, it was reported that Office Depot (ODP) and Office Max (OMX) are in “advanced” merger talks and an announcement is expected to be announced sometime this week. Both office supply retailers are up more than 25% in early trading.

For the most part, Gurus have been net sellers in both office supply retailers. Prior to the proposed merger, the two companies have been struggling as Staples (SPLS) and Amazon (AMZN) continued to take market share. The only Guru purchasing shares of Office Depot (ODP) is Gotham Capital’s Joel Greenblatt but he might be doing so as part of his value weighted index strategy as oppose to fundamental analysis. With Office Max (OMX), Schneider Capital Management’s Arnold Schneider recently added to his position and the office retailer now represents 1.9% of his portfolio.

Earnings

Medical products maker Medtronic (MDT) reported EPS of $0.93 versus analyst estimates of $0.91. Revenue increased 2.8% to $4.03 billion and was up 4% excluding currency fluctuations.The company also confirmed its 2013 guidance as the company deals with a “changing” healthcare environment.

Several Gurus purchased Medtronic in the last quarter. The shares have had a nice run up in the first month and a half of the year so I wouldn’t rush to buy it. Gurus who have recently purchased Medtronic include:

• Donald Yacktman for the Yacktman Focused Fund
• Joel Greenblatt
• Hotchkis & Wiley
• Ray Dalio
• John Hussman
• Bill Nygren

Shares of ConAgra Foods (CAG) are up slightly as the company raised its 2013 guidance to $2.15, two cents above analysts estimates. Adding to the raised forecast are positive results from its recent $5 billion acquisition of food maker Ralcorp and better-than-expected results from its consumer foods and commercial foods segments. ConAgra Foods Inc. announced in November that it was buying store-brand food producer Ralcorp for $90 per share. The Ralcorp acquisition is expected to contribute about 5 cents per share to ConAgra's fiscal 2013 adjusted earnings.

It has been a mixed bag with Gurus and ConAgra. The stock is up roughly 15% year to date and some Gurus might be taking advantage of the recent runup to take profits. Gurus who have added to their ConAgra positions include SAC Capital’s Steven Cohen, GAMCO Investors Mario Gabelli and John Hussman. Neither’s position is significant.

Finally, PC maker Dell (DELL) is set to report after the bell. But its quarterly results may be overshadowed by any remarks the company’s founder and current CEO Michael Dell makes about the plans (and price) since he and a group of investors announced a deal to buy the struggling PC maker for $24.4 billion. Opposition is lining up against the proposed purchase price with Southeastern Asset Management and T. Row Price leading the way.

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