Tupperware's signature product is the food storage container that carries the company's patented seal. One could make the case that U.S. shoppers will buy fewer of these containers as the U.S. economy slows, as they are, strictly speaking, a discretionary purchase. Still, we know from previous belt-tightening periods Americans tend to cut back on dining out. Undoubtedly that means more home prepared meals, and leftovers, which need containers -- a positive trend for Tupperware.
Further, with sales in more than 100 countries, Tupperware is adequately-positioned to benefit from continued good-to-excellent GDP growth in emerging markets. The Reuters F2007/2008 revenue consensus estimates for TUP are $1.91 billion / $1.99 billion. Tupperware's shares fell $1.83 to $33.63 in Wednesday afternoon trading.
(Note: Technical analysis agnostics stop reading here; all others continue.)
Technically, Tupperware's chart looks strong. TUP has been above its 50-day moving average for about nine months, excluding the market's August 2007 sell-off. With a p/e of 20 TUP is not cheap, but not substantially overpriced, either.
Stock Analysis: Tupperware (TUP) is a moderate-risk stock not suitable for low-risk investors. The preferred strategy: Buy TUP on a pull-pack to $34 or $33. Sell / Stop Loss: $22.
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