Tupperware Brands Corporation (TUP) Riding the BRICs: Buy, Hold or Sell?

Tupperware’s beauty segment in the developed market of North America saw a single digit growth of 8%, but Brazil in south showed a whopping 30% growth. Tupperware’s Brazil business is still in its early phase and management guides the strong double digit growth in the region to continue for at least five more years.

Likewise, another of TUP’s developed markets, Germany, where Tupperware has had half a century long stronghold, showed single digit growth of 4% for the quarter. Contrast this with the BRIC economy, Russia, where Tupperware businesses went up by 13%.

India, where Tupperware has recently expanded to, has proved to be a very lucrative market for the company. As an increasing number of average middle class Indian women step out of their houses for work, Tupperware has cleverly introduced innovative and quick food-preparation products to attract them. CEO Rick Goings did the last quarter earnings conference call from India, which just shows how closely and keenly the top management is focusing on this market, which, by the way, also showed double digit growth in the latest quarter and is expected to continue the trend.

Currently, the largest BRIC economy, China, has posed some troubles for Tupperware. Counterfeit Chinese products disrupted Tupperware’s sales to an extent. However, local government helped destroy most of these and put Tupperware back on its growth track. For the coming year 2013, a strong double digit is expected out of China as well.

Foolish Take

A forward P/E of 13.59 and an EPS guidance of $5.70 gives the stock a fair value of $77.46. The company has beaten earnings in six out of past seven quarters. With a strong dividend yield and another round of $400 million share repurchases announced for the coming year, now is the time to stay with Tupperware.


The article Tupperware Riding the BRICs: Buy, Hold or Sell? originally appeared on Fool.com and is written by Palwasha Saaim.

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