TUP - Tupperware is an unconvintional position
Tupperware is an unconventional trade because it has had declining revenues and is expecting declining revenue in 2022.
This trade is based on restructuring plans by the company and share buy backs as well.
Traditionally, TUP sold its products through retailer groups and an active sales force team.
In 2020, they began the restructuring plans
2020:
- Hired new management team with direct selling focus (direct to consumer and e-commerce). This includes the hiring of Miguel Fernandez, former global president of Avon products where he executed similar plans.
- Delivered $192 million in cost savings.
The company is investing in influncer, digital marketing and e-commerce. As they do this, they are able to reduce their physical presence.
Board approved a 250 million dollar share buyback program in 2021.
The stock has a short interest position of 9.11%
The stock buy back program, followed by the short squeeze is likely to produce gains over the next 2 years.
This is a turnaround play with a focus on growth and increasing cash flow year over year.
Final notes:
- Bill Miller is a well known value investor who has a track record of bearing the stock market (google him) and he has been purchasing this in July of this year.
- Bill Miller focuses on buying undervalued stocks.
- at this price level you are getting a stock considered undervalued by Miller, and you are getting it cheaper
- I do admit it is hard for me to get 'excited' about owning darned tupperwear. But maybe this is the kind of holding I need to start getting excited about.
- Turnaround present amazing opportunities.
- The short squeeze and share buy back will complement each other to create returns.
The cheaper the stock gets, whereas the fundementals are not changed or are improving, the greater the opportunity becomes.
This makes about 2.3 % of my portfolio, although I would certainly buy more should we see it come down to levels of 7-8 dollars.
Anticipated ROI
I can see 100% to 200% return over a period of lesser than 3 years. I am willing to hold this for 3 years, to see at least 100% return.
The faster I get my return, the more likely I would exit the position, and only re-enter should it come back down. For an example, if in this calendar year I see $38. I would sell it at that point.
This trade is based on restructuring plans by the company and share buy backs as well.
Traditionally, TUP sold its products through retailer groups and an active sales force team.
In 2020, they began the restructuring plans
2020:
- Hired new management team with direct selling focus (direct to consumer and e-commerce). This includes the hiring of Miguel Fernandez, former global president of Avon products where he executed similar plans.
- Delivered $192 million in cost savings.
The company is investing in influncer, digital marketing and e-commerce. As they do this, they are able to reduce their physical presence.
Board approved a 250 million dollar share buyback program in 2021.
The stock has a short interest position of 9.11%
The stock buy back program, followed by the short squeeze is likely to produce gains over the next 2 years.
This is a turnaround play with a focus on growth and increasing cash flow year over year.
Final notes:
- Bill Miller is a well known value investor who has a track record of bearing the stock market (google him) and he has been purchasing this in July of this year.
- Bill Miller focuses on buying undervalued stocks.
- at this price level you are getting a stock considered undervalued by Miller, and you are getting it cheaper
- I do admit it is hard for me to get 'excited' about owning darned tupperwear. But maybe this is the kind of holding I need to start getting excited about.
- Turnaround present amazing opportunities.
- The short squeeze and share buy back will complement each other to create returns.
The cheaper the stock gets, whereas the fundementals are not changed or are improving, the greater the opportunity becomes.
This makes about 2.3 % of my portfolio, although I would certainly buy more should we see it come down to levels of 7-8 dollars.
Anticipated ROI
I can see 100% to 200% return over a period of lesser than 3 years. I am willing to hold this for 3 years, to see at least 100% return.
The faster I get my return, the more likely I would exit the position, and only re-enter should it come back down. For an example, if in this calendar year I see $38. I would sell it at that point.
Even they are worried about not buying in quickly!
This is one of my favourite positions atm. I just love undervalued stocks.
My price targets:
$22.13 end of 2022
$27.54 end of 2023
$33.06 end of 2024
So far, we are seriousely exceeding those anticipated return levels, looking to add more to the position over the next earnings period. TUP is building a huge level of support for me making me comfy and happy here :)
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