Tupperware makes up for the sell-off, and then some

Posted Aug 25th 2009 4:20PM by Joseph Lazzaro
Filed under: Stocks to Buy

I guess Wall Street over did it a little bit, on the downside, with Tupperware earlier this year, driving shares down to about $11 in March. I caught the TUP train at $23.48 on April 28, 2009.

TUP is now at $38.10, good for a smooth 60% gain. And Tupperware's growth story remains intact: Tupperware will benefit from the U.S. 'frugal consumer' trend toward many, many more leftovers and fewer meals out. Hence, I'm Reiterating my Buy rating for Tupperware Brands Corporation (NYSE: TUP).

Further, TUP's decision to acquire a beauty/personal care products business from Sara Lee, concentrated primarily in Latin America and Asia Pacific, also was a good one: margins for these two lines are expected to exceed TUP's corporate average.

However, short-term, TUP is slightly overbought, due to its remarkable run in 2009, so buyers should wait for a pullback to the $35-range. The First Call FY2009/FY2010 EPS estimates for TUP are $2.68 to $3.06. I've raised the Sell/Stop Loss to $14 from $8.

Stock Analysis: Tupperware is a moderate-risk stock. If you've already purchased the company's shares, hold them. If not, consider buying a 50% position in TUP on a pullback to the $35-range. Sell/Stop Loss if you were to buy shares in this company: $14.

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Disclosure: Lazzaro has no positions in stocks, but does own shares in two Pimco Bond Funds: PHDAX and PYMAX.

Tags: cosmetics, food storage, FoodStorage, plastic, TUP, Tupperware

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Reader Comments (Page 1 of 1)

8-27-2009 @ 1:18AM

Denny said...

I will NEVER again buy a piece of tupperware! For years Iwas told when I purchased products from them that they came with a LIFETIME warranty. Within the last year Tupperware has recinded their warranty and no longer will replace their lifetime warranty products. Never again.