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Hedge Funds Aren’t Crazy About Avon Products, Inc. (AVP) Anymore

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Avon Products, Inc. (NYSE:AVP) was in 25 hedge funds’ portfolio at the end of March. AVP has experienced a decrease in support from the world’s most elite money managers of late. There were 29 hedge funds in our database with AVP holdings at the end of the previous quarter.

According to most investors, hedge funds are perceived as slow, outdated investment tools of yesteryear. While there are over 8000 funds in operation at the moment, we hone in on the upper echelon of this club, about 450 funds. Most estimates calculate that this group controls the lion’s share of all hedge funds’ total asset base, and by paying attention to their highest performing equity investments, we have come up with a number of investment strategies that have historically outperformed the S&P 500 index. Our small-cap hedge fund strategy outstripped the S&P 500 index by 18 percentage points per annum for a decade in our back tests, and since we’ve started sharing our picks with our subscribers at the end of August 2012, we have trumped the S&P 500 index by 23.3 percentage points in 8 months (explore the details and some picks here).

Avon Products, Inc. (NYSE:AVP)Just as key, optimistic insider trading activity is another way to break down the stock market universe. As the old adage goes: there are many stimuli for an upper level exec to sell shares of his or her company, but just one, very simple reason why they would behave bullishly. Various empirical studies have demonstrated the market-beating potential of this strategy if investors know what to do (learn more here).

Now, let’s take a look at the key action regarding Avon Products, Inc. (NYSE:AVP).

What does the smart money think about Avon Products, Inc. (NYSE:AVP)?

In preparation for this quarter, a total of 25 of the hedge funds we track were long in this stock, a change of -14% from the previous quarter. With hedgies’ positions undergoing their usual ebb and flow, there exists a select group of notable hedge fund managers who were upping their holdings substantially.

When looking at the hedgies we track, Donald Yacktman’s Yacktman Asset Management had the most valuable position in Avon Products, Inc. (NYSE:AVP), worth close to $392.5 million, comprising 2% of its total 13F portfolio. The second largest stake is held by D. E. Shaw of D E Shaw, with a $64.9 million position; the fund has 0.2% of its 13F portfolio invested in the stock. Other hedgies that hold long positions include Phill Gross and Robert Atchinson’s Adage Capital Management, Donald Chiboucis’s Columbus Circle Investors and Daniel S. Och’s OZ Management.

Since Avon Products, Inc. (NYSE:AVP) has experienced falling interest from the entirety of the hedge funds we track, it’s easy to see that there lies a certain “tier” of money managers who sold off their full holdings in Q1. At the top of the heap, Jacob Gottlieb’s Visium Asset Management said goodbye to the largest stake of all the hedgies we track, valued at about $53.9 million in stock., and Richard S. Pzena of Pzena Investment Management was right behind this move, as the fund said goodbye to about $15.6 million worth. These bearish behaviors are important to note, as total hedge fund interest dropped by 4 funds in Q1.

How are insiders trading Avon Products, Inc. (NYSE:AVP)?

Bullish insider trading is most useful when the company in focus has experienced transactions within the past half-year. Over the last 180-day time frame, Avon Products, Inc. (NYSE:AVP) has seen 1 unique insiders buying, and 1 insider sales (see the details of insider trades here).

Let’s go over hedge fund and insider activity in other stocks similar to Avon Products, Inc. (NYSE:AVP). These stocks are Colgate-Palmolive Company (NYSE:CL), Kimberly Clark Corp (NYSE:KMB), Nu Skin Enterprises, Inc. (NYSE:NUS), Estee Lauder Companies Inc (NYSE:EL), and Energizer Holdings, Inc. (NYSE:ENR). This group of stocks belong to the personal products industry and their market caps match AVP’s market cap.

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