I’m always on the hunt for a contrarian investment opportunity where a company may be struggling, ignored by investors, and down to levels where the stock is attractive.

I view beaten-up stocks as a fire sale at discount prices and an investment opportunity. Why buy when a stock is trading at its highs when there is an investment opportunity to buy when the stock sells off.

A couple of contrarian picks I have presented in the past include Deckers Outdoor Corporation (NASDAQ/DECK) and Green Mountain Coffee Roasters, Inc. (NASDAQ/GMCR). Both stocks are well up from where they were at the time I first saw a potential investment opportunity.

The key when evaluating down-and-out companies as a possible investment opportunity is to determine whether the company has a strong brand and if the probability of a turnaround is strong.

Another company that had been on the sale racks is Avon Products Inc. (NYSE/AVP), which has a current stock price of $20.57. Avon is a well-known beauty products company that has been around for over 125 years; but the company is now facing operational issues at its worldwide operations due to weaker growth in the global economy.

Avon is a major global brand, and for this reason, I see a possible investment opportunity. Avon is the world’s largest direct seller of women’s products with sales in over 100 countries via its network of over six million independent Avon sales representatives who market the company’s beauty products along with its fashion and home products.

To deal with the negative revenue growth, Avon said it would pursue a restructuring strategy that is aimed at cutting costs by $400 million annually by the end of 2015. The plan includes cutting 1,500 global jobs and shutting operations in South Korea and Vietnam. The end plan is to return the company to steady growth.

While there is no guarantee, I like the company and feel it may be a good investment opportunity to accumulate its shares on the price weakness. You will need to decide.

Avon reported sequential sales growth from 2004 to 2008, prior to a decline in 2009; however, sales rebounded in 2010 and 2011, growing from $6.9 billion in 2003 to $11.3 billion in 2011. Sales are estimated to increase by one percent to $10.8 billion in 2013, followed by a 3.6% jump to $101 billion in 2014, according to Thomson Financial consensus estimates.

On the earnings side, Avon made money in the last 10 straight years, but the results have been inconsistent. For the stock to rally, Avon must deliver. Earnings are expected to improve over the next two years, with estimates of $1.02 per diluted share in 2013 and $1.26 per diluted share in 2014, based on Thomson Financial consensus estimates.

Avon has underperformed the S&P 500, advancing eight percent over the past 52 weeks, versus a 12.8% advance by the S&P 500, so there may be an investment opportunity.

The chart below shows Avon’s breakout at the horizontal blue resistance line following a nice upward trend, based on my technical analysis.

The stock gapped higher from $17.50 as indicated by the blue circle. The relative strength is also strong. The key now for Avon is to hold onto the recent break. There’s a possibility the stock could fall back and cover the gap, which would be a buying opportunity.

Chart courtesy of www.StockCharts.com

As is the situation with many contrarian stocks, Avon may also fit into this category and could see a rally over the next few years, thereby making the stock a good investment opportunity.