Investment Firm Adds 44 Million Shares of Avon to Portfolio

In a Schedule 13G filed Friday with the U.S. Securities and Exchange Commission (SEC), Capital Research Global Investors, a division of investment firm Capital Research and Management Company, revealed that it has raised its stake in Avon Products Inc. (NYSE: AVP) to 48,993,600 shares as of June 30, 2015. At the end of March, Capital Research reported ownership of 4,875,300 shares of Avon stock. (To be able to file a 13G instead of a 13D, the party must own between 5% and 20% in the company.)

The news follows by a day the announcement by Coty Inc. (NYSE: COTY) that it purchased Procter & Gamble Co.’s (NYSE: PG) cosmetics brands for $12.5 billion. Before coming public in 2013, Coty offered to acquire Avon for something more than $10 billion, an offer that Avon refused as being inadequate.

Avon’s market value today is around $2.6 billion. Avon shares traded down about 1% to a new 52-week low of $ 5.53 yesterday. The 52-week high was $ 13.97.

The long downtrend is still current, but some investors are looking to purchase at more attractive falling price. VaR calculated for 27 July gives probability of less than 1%, AVP price to fall below $ 4.89 and within today's session – below $ 5,29.