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Marathon Oil (NYSE:MRO) is a name owned by Canyon Capital Advisors, which is a value-oriented hedge fund with approximately $19 billion in assets. As of June 30, Canyon reportedly owned $53MM in Marathon Oil stock. Marathon looks quite cheap right now at 5.3X trailing earnings and 7.4X forward earnings estimates, especially when viewed from a cash flow perspective. Marathon's EV/EBITDA of 2.27X looks quite impressive, as does the 1.10X price to book value multiple. Return on equity for MRO of 11% leaves a little to be desired, but still fits in with Buffett's requirement that a company should have a 10% ROE or better to qualify as a "good" business.

Growth at Marathon of around 35% per year (40% top line and 30% bottom line) looks to be strong right now, and the company has spit off over a billion in free cash flow in each of the past two quarters. A tiny insider buy made by director Gregory Boyd is encouraging, and given the fact that the stock is so cheap at current valuations, Marathon looks to be a strong buy regardless of the overall economic environment.

Mosaic (NYSE:MOS) is also loved by the hedge fund community, with many hedge funds owning a piece of the business, including Global Thematic Partners, Pabrai Funds, Blackrock, and Highbridge Capital to name just a few. MOS shares look undervalued at 9.6X earnings, with a healthy 25% ROE and 25% net profit margin, as well as a low 6.2X EV/EBITDA multiple. MOS delivered an incredible 76% YOY earnings growth rate in the last quarter, and given that potash is a resource in scarce supply, hedge funds expect this stellar growth to continue well into the future. Jeremy Grantham wrote an interesting research piece on potash. If Grantham is right about potash supply and demand, Mosaic may well be one of the best stocks to own over the next decade or longer.

Oshkosh Corporation (NYSE:OSK) is a Carl Icahn holding trading at just 5X earnings and for only 3X EV/EBITDA. Oshkosh boasts an ROE of 25% with a PEG ratio of around .82X. Rumors that Icahn wanted Navistar to buy OSK are likely unfounded, but the stock is so cheap that I would not be surprised to see a bidder emerge for this company at current prices. In fact, the rumor that Icahn was pushing for a merger of Navistar and Oshkosh was enough to send OSK stock 7% higher last week, as Icahn owns over 9% of OSK. No matter what the reasoning behind OSK's surge, the valuation and discount to a reasonable intrinsic value estimate for Oshkosh means that hedge funds will be circling the name as Icahn finds a way to unlock value.

Apple (NASDAQ:AAPL) still clocks in as one of the largest holdings of major hedge funds, with $13.4 billion of hedge fund money allocated to the name as of the end of the second quarter. Now that Steve Jobs is gone, the pressure on the remaining team at Apple will be huge, but the company will likely continue to innovate and succeed in the years to come, albeit at slightly lower top- and bottom-line growth rates (the law of large numbers dictates that, at some point, Apple's growth must taper off to a degree).

With that said, hedge funds such as Einhorn's Greenlight Capital, Tiger Global, Jana Partners and Maverick Capital are all big owners of AAPL common stock, and will likely hold these shares through thick or thin. Many of these hedge funds are likely using a collar option or covered call position in the stock to mitigate some of the risks inherent in owning the world's largest consumer discretionary retail/tech stock.

Apple shares are fairly cheap at 14.6X trailing earnings and 10.4X forward earnings. The company is trading for just 9.5X EV/EBITDA and sports an incredible 41.7% return on equity along with a 22% net profit margin. Even though growth is projected to slow in future quarters, new products like the Apple TV and the never-ending updates of the iPhone will likely continue to drive revenues in the future. However, with a $375 billion market cap, some investors must be wondering if the incredible growth rate can be maintained in future quarters. If the past is any guide, Apple may continue to outpace analyst and investor expectations.

WellPoint (WLP) shares are still cheap at current levels at 9 times earnings and 8.8X forward earnings. WLP shares are fetching just 2.6X EV/EBITDA and trade for around book value. Like other health insurance firms, the company is somewhat highly leveraged and has little in the way of tangible equity from a margin of safety perspective. The stock boasts a reasonable 12% return on common equity and a net profit margin of around 5%, which is fairly good given that health insurance firms operate in a commoditized market sector, which has favorable growth trends behind it and a bright future ahead, given the demographics of aging baby boomers.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Source: 5 Cheap Stocks Hedge Funds Love