Shah Capital Unloads GNC Holdings Inc (GNC), Buys Rival Vitamin Shoppe Inc (VSI) Instead

In Avon Products, Inc. (NYSE:AVP), Shah Capital boosted its stake by 68% to 6.96 million shares worth $16.22 million during the third-quarter. In August, Avon Products, Inc. (NYSE:AVP) announced that its CEO Sheri McCoy will step down on March 31, 2018 and the company is currently in the process of identifying a replacement. Avon Products, Inc. (NYSE:AVP)’s stock is down by 52% since the beginning of the year, on the back of disappointing financial results the company posted for the past three quarters. In this way, the new CEO will have to change a lot of things in Avon Products, Inc. (NYSE:AVP)’s business model to turn things around, and as an activist investor, Shah might get involved to help identify the right person for the job.

Genworth Financial Inc (NYSE:GNW) represents Shah Capital’s second-largest holding in terms of value as of the end of September. The fund increased its position in the company by 4% during the third-quarter and disclosed a $23.38 million stake containing 6.07 million shares in its latest 13F. Genworth Financial Inc (NYSE:GNW) is currently in the process of being acquired by China Oceanwide, which offered to buy it for $2.7 billion last year. The deal was recently green-lighted by the U.S government and the buyer expects it to be completed by the end of 2017.

China Yuchai International Limited (NYSE:CYD) is by far Shah Capital’s biggest bet, as the fund’s position in the company amasses 37.60% of its 13F portfolio’s value. At the end of September, Shah Capital held 3.36 million shares worth $74.76 million in the holding company of Chinese diesel engine manufacturer Guangxi Yuchai Machinery Company Limited. China Yuchai International Limited (NYSE:CYD) represents one of Shah Capital’s longest activist campaigns. The fund has owned shares of the company since 2006, and in 2013 it urged the company to raise its stake in its engine manufacturing subsidiary to 100% from 76.4%.

The investor argued that the company’s stock could be worth $50 per share if China Yuchai International Limited (NYSE:CYD) bought the rest of the subsidiary’s stake and sold its remaining stakes in real estate company HL Global Enterprises and Thakral, among other things. Earlier this year, China Yuchai International Limited (NYSE:CYD) announced the acquisition of the remaining stake in engine maker Guangxi Yuchai Crankshaft Co., Ltd. In addition, HL Global Enterprises has been shedding assets this year.

Disclosure: None