Insiders Are Selling Tupperware

Nov. 4.13 | About: Tupperware Brands (TUP)

In this article, I will feature one consumer goods stock that has seen intensive insider selling during the last 30 days. Intensive insider selling can be defined by the following three criteria:

  1. The stock was sold by three or more insiders within one month.
  2. The stock was not purchased by any insiders in the month of intensive selling.
  3. At least two sellers decreased their holdings by more than 10%.

Tupperware Brands Corporation (NYSE:TUP) operates as a direct seller of various products across a range of brands and categories through an independent sales force worldwide.

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Insider selling during the last 30 days

Here is a table of Tupperware's insider-trading activity during the last 30 days by insider.

Name Title Trade Date Shares Sold Rule 10b5-1 Current Ownership Decrease In Ownership
Michael Poteshman CFO Nov 1 2,000 Yes 40,576 shares 4.7%
Edward Davis VP Oct 25 5,000 No 3,503 shares 58.8%
Glenn Drake Group President Oct 25 19,850 No 11,801 shares 62.7%
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There have been 26,850 shares sold by insiders during the last 30 days. More details about the Rule 10b5-1 trading plan can be found from this link.

Insider selling by calendar month

Here is a table of Tupperware's insider-trading activity by calendar month.

Month Insider selling / shares Insider buying / shares
November 2013 2,000 0
October 2013 26,850 0
September 2013 2,000 0
August 2013 95,564 0
July 2013 3,802 0
June 2013 13,532 0
May 2013 54,706 0
April 2013 10,200 0
March 2013 77,246 0
February 2013 241,955 0
January 2013 171,350 0
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There have been 699,205 shares sold and there have been zero shares purchased by insiders this year.

Financials

Tupperware reported the third-quarter financial results on October 23 with the following highlights:

Revenue $603.2 million
Net income $49.9 million
Cash $126.0 million
Debt $911.8 million
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Outlook

Tupperware's guidance for the fourth quarter and full-year 2013 is as follows:

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Competition

Tupperware's competitors include Avon Products (NYSE:AVP), and Newell Rubbermaid (NYSE:NWL). Here is a table comparing these companies.

Company TUP AVP NWL Industry Average (Packaging & Containers)
Market Cap: 4.67B 7.77B 8.65B 503.78M
Employees: 13,000 39,100 18,300 2.29K
Qtrly Rev Growth (yoy): 0.02 -0.09 -0.03 0.08
Revenue: 2.67B 10.40B 5.97B 1.16B
Gross Margin: 0.67 0.62 0.38 0.22
EBITDA: 461.30M 1.07B 924.80M 92.83M
Operating Margin: 0.16 0.08 0.13 0.07
Net Income: 259.00M -104.90M 411.60M N/A
EPS: 4.78 -0.36 1.56 0.47
P/E: 19.03 N/A 19.06 17.92
PEG (5 yr expected): 1.37 1.09 1.74 1.37
P/S: 1.76 0.76 1.44 0.46
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Tupperware has the highest P/S ratio among these three companies.

Here is a table of these competitors' insider-trading activities this year.

Company Insider buying / shares Insider selling / shares
AVP 13,000 50,000
NWL 0 286,341
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Only Tupperware has seen intensive insider selling during the past 30 days.

Conclusion

There have been three different insiders selling Tupperware and there have not been any insiders buying Tupperware during the past 30 days. Two of these three insiders decreased their holdings by more than 10%. Tupperware has an insider ownership of 1.00%.

Tupperware is trading at a P/E ratio of 19.03 and a forward P/E ratio of 14.82. The company has a book value of $5.19 per share.

Before entering short Tupperware, I would like to get a bearish confirmation from the Point and Figure chart. The two main reasons for the proposed short entry are relatively high P/S ratio and the intensive insider selling activity.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.