Hedge fund grabs a piece of Office Depot Paul Sakuma / AP file Activist investment fund Starboard Value grabbed a 13.3 percent stake in Office Depot Monday. Activist investment fund Starboard Value grabbed a 13.3 percent stake in Office Depot Monday and laid out a series of changes the office products retailer can implement in order to become a more profitable company. In a letter to Office Depot's board, Starboard said it believes the retailer is "deeply undervalued" and a "substantial opportunity" now exists for the company to improve its performance and valuation. Starboard's stock purchase makes it Office Depot's largest common shareholder. It follows a number of similar bids by investors to boost the value of besieged bricks-and-mortar retailers. Starboard, which is known for targeting smaller companies it thinks are undervalued, recently launched a campaign to revitalize former Internet giant AOL, pushing the company to change its strategy. Analysts say that the troubles facing traditional retailers such as Staples and Office Depot make them targets for private equity companies and other investors. With depressed valuations and good cash flow, the companies are attractive investment prospects. "You have a lot of retailers right now that are undervalued and may or may not be making the right choices strategically, so you have these investors coming in and saying these are buying opportunities that we can tweak and make a lot of value," said Anthony Chukumba who covers retailers for BB&T Capital Markets. However, not all retailers are good targets for investors, he said. A company such as RadioShack, which has a depressed valuation, tried to sell itself a number of years ago, but "no one came to the party," said Chukumba. So it can't just be that the company is cheap. If investors think it's fundamentally broken they're not going to be particularly interested," he added. "But if it's a situation where a company is facing cyclical challenges and not secular challenges and changes can be made to improve profitability, it's more interesting, and Staples and Best Buy fall under that category," Chukumba said. In early August, Best Buy's founder Richard Schulze made a bid to take the struggling electronics retailer private just months after being ousted as company chairman amid an investigation into former CEO Brian Dunn's "improper relationship" with a female employee. Schulze's aim was to buy the world's largest consumer electronics chain with the help of private equity sponsors. He already owns 20 percent of the company's stock. Last week a report said several private equity companies, including Bain Capital, are looking at a buyout offer for office supplies retailer Staples. Starboard's letter called for Office Depot to improve itself by reducing general business expenses and advertising costs. Starboard also said Office Depot should increase the mix of higher-margin services in its stores and downsize to smaller store formats to drive substantially higher operating margins. Office Depot's management "must act with a renewed sense of urgency and discipline to reduce expenses and execute on strategic initiatives," Starboard said, adding that it hopes to continue "a constructive dialogue with the company's board of directors and senior management to address the challenges and opportunities facing Office Depot, and to ensure that the company is run with the best interests of all shareholders as the primary objective." Office Depot has struggled in recent years, hurt by sliding sales as cutbacks in spending as business customer buy fewer office supplies and increasingly turn to Internet-based vendors, such as Amazon.com. Also, a high unemployment rate means retailers in general are suffering from lower sales. Click here to check on shares of Office Depot.