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Tupperware: If Only It Can Survive

Mar. 02, 2020 1:22 PM ETTupperware Brands Corporation (TUP)14 Comments


  • Tupperware is about as much of a "household name" as any, and over the past year its stock has fallen more sharply than a kitchen knife.
  • With a stock trading at 2x trailing free cash flow and bonds trading at 18% yield, the company is priced to fail by June 2021, when those bonds come due.
  • In this article, I look at some simple numbers and scenarios of the stock going to zero versus bouncing back to a sustainable cash multiple.
  • Looking for more stock ideas like this one? Get them exclusively at Long Run Income. Get started today »

The name of Tupperware Brands Corporation (NYSE:TUP) is one of many I have known since I was very young, and probably thought in the back of my mind would continue to be around for many more decades. That's not because I actually own any Tupperware brand products, nor have I ever been to a Tupperware party, but like the names Walkman, or Band-Aid, or escalator, it is a name that has become so ubiquitous many of us even call competing products by that name. I have never owned TUP stock, but when the name popped up on one of my screens after its recent fall, I thought it was worth at least a quick look. At first, TUP looks like a debt distress situation similar to Toys R Us, but the bond market still seems to be giving TUP a decent chance of making it, and if it does, TUP's shares are unlikely to keep trading at 2x free cash flow.

Tupperware's Historic Numbers

TUP shares have fallen by 80% over the past four months, 90% over the past year, and by about 97% from its high in early 2014. This makes it one of the latest examples of a stock that falls 90% by first falling 80%, and then falling another 50%, and of the dangers of trying to "buy on dips". Below is what I found to be the more informative chart of TUP's market cap over the past 20 year, compared with its free cash flows and debt level. The high level numbers that seem to stick out are:

  1. TUP has fallen from trading at well over 20x cash flow, to now trading at less than 2x free cash flow, and
  2. That mostly seems to be doing to a rising debt level, that is now over 12x that

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This article was written by

Tariq Dennison profile picture

Tariq Dennison, runs an RIA focused on international clients and portfolios, applying his on-the-ground experience as an expat investing in diverse foreign markets. Tariq is the author of the book "Invest Outside the Box" and soon-to-be-released "10 Ways To Invest." He lives in Switzerland, and has worked in Finland, Canada, the UK, Hong Kong, and Singapore.

Tariq is the leader of the investing group The Expat Portfolio where he helps members invest internationally with greater clarity and confidence. Features of the service include: Frequent, short, and focused analysis, access to his watchlist and dashboard, guides to specific foreign markets, and direct access to Tariq and his community in chat for discussion and questions. Learn more.

Analyst’s Disclosure: I/we 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.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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Comments (14)

Chatos profile picture
I did own the bond until early this week and sold with a big loss, then shorted the stock and made back 1/2 of my losses - now the shares have been up for 2 days on no news which might be a new entry for a new short, the company is doomed - MLM is a thing of the past,.. these days people order at Amazon or at Alibaba
Humble Value Miner profile picture
and who forbids them to sell over the Internet?
Actually most MLMs/direct marketers have polices against open internet use to market their products, or at least limit them to using an in-house site at additional cost. The simple reason is, in an industry totally dependent on recruiting, unlimited internet use allows potential distributors to see just how saturated the market is, as well as providing a rather lucrative revenue channel for the corporate vault. Imagine Googling any MLM right after attending an "Opportunity" meeting and having 1000's of existing distributor's websites pop up within your small town alone? Who would join?
Humble Value Miner profile picture
I believe the brand name is very strong also internationally (everybody knows it in Italy, and as something cool): management could open new product lines, try direct selling, or sell to somebody with better ideas (anything around/about the house can fit, and will make automatic headlines). I don't think there is another international brand so powerful with so low market cap.
What do you think about this?
schizoidmantoo profile picture
It was not but just a few months ago that the bonds were rated BBB-, the bottom of investment grade. So I thought they were safe to buy. Less than 6 months later, they are B rated junk. I am currently down 14.66% but that is much better than just last week when I was down over 17%. The bonds were up 0.88% today.
I've been thinking of cutting my losses and selling out, but with the recent movement and the insider buying the article mentions, I may hold out until June next year and hopefully get all my principal back.
insider buying? fake news for sure, plus probably using shareholder money anyway not their own if true.
cut your losses, this one is a goner.
Looks like I am going to have to open a Go Fund Me page after all....
Jeremy Raper profile picture
this stock is a zero.

McBifferton profile picture
Well, soon to be zero anyway.
Erman profile picture
this will probably go down as one of my worst investments.... ranking right up there with Gold, Metal Storm Tech, and of course ReWalk Technology....
NilSatis profile picture
My brother hosted a Tupperware event for a friend. Was surprised at the range of product but shocked at the price of the goods. A NZ equivalent product from Sistema you could pick up at quarter the price of equivalent quality.
yes, that is the conundrum.....price!
Price was never an issue when it came attached to an "opportunity" to build a business, however the internet allows too much transparency into the realities of failure. Avon and Tupperware are simply canaries in the direct selling/MLM mine.
Tariq Dennison profile picture
Guess that explains why they might not be able to maintain the revenue needed to stay afloat. It's hard for a business with multiple levels of distribution costs to compete with Amazon.
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