After surging by over 10% in the final half-an-hour of yesterday’s trading session, Avon Products, Inc. (NYSE:AVP) has put another 10% gain on the board so far this morning. The strong push for the stock is the result of Avon announcing that is in engaged in talks with Stephen Feinberg’s Cerberus Capital Management to sell the company’s North American division to the private equity firm, which would provide Avon with some much-needed cash. While investors have largely hailed the move, as evidenced by its soaring stock, not all shareholders of the company like the idea. Barrington Capital Group, which collectively owns about 3% of Avon’s shares, thinks the direct seller of beauty products should focus instead on restructuring its operations and reinvigorating its image, rather than turning to band-aid solutions that will only prolong the seemingly-inevitable at this point.
Avon’s sales have been cut in half since 2007 and its stock has lost 90% of its value since August 2008, including a 53% slide this year alone. The company has more long-term debt than its entire market capitalization at present, even after the gains of the last two days, which perhaps starkly illustrates Barrington Capital Group’s contention that Avon selling off pieces of itself is folly. Despite the immense challenges for Avon, the firm still has many believers among the top investors tracked by Insider Monkey, who we look to for clues as to the likely future performance of the firm.
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Avon Products, Inc. (NYSE:AVP) investors should be pleased to know that there was an increase in hedge fund sentiment for the stock in the third quarter, which we’ll get to on the next page.=. At the end of this article we will also compare Avon Products to other stocks including Flow International Corporation (NASDAQ:FLOW), Ophthotech Corp (NASDAQ:OPHT), and Mpg Office Trust Inc (NYSE:MPG) to get a better sense of its popularity compared to similar-sized companies.
Keeping this in mind, let’s go over the recent trading activity on Avon Products, Inc. (NYSE:AVP).