Remember Tupperware? You may not want to, if you own shares. "The stock has been a dog in this bull market," says value investor Mark Boyar. Yet he is scooping up Tupperware (TUP) shares, now at 17, down from its high of 25 in June, 1999. Boyar says the stock has become an attractive value play--worth twice its current price. And he thinks it's a buyout play to boot.
Boyar doesn't usually scout for takeover prey, but he stumbled on information not widely known: Vorwerk Group, a German direct-marketing company, has acquired a 9.6% stake in Tupperware. "Management owns an insignificant number of shares, making the company vulnerable to a takeover," argues Boyar.
"I suspect Vorwerk, whose business would fit well with Tupperware, wants to buy Tupperware, still one of the world's best-known brand names," says Boyar. He thinks it's worth 40 in a buyout. Tupperware sells worldwide through a direct-selling method. He expects Tupperware to earn $1.80 a share this year, up from last year's $1.37. Tupperware couldn't be reached for comment.