All This And Free Tupperware, Too

Buy one, take two? Such a deal is in the offing, say some pros, from Premark International (PMI), which will soon spin off its profitable Tupperware division. Now at 56, shares of Premark, a diversified maker of consumer products with sales of $3.6 billion, have been inching up as more investors begin to recognize that, after the split, Tupperware alone could fetch 50.

So figures analyst Peter Doyle of The Spin-Off Calendar, which is a newsletter. He estimates that Tupperware will earn $2.80 a share this year as a stand-alone company, with sales of $1.4 billion. He thinks Tupperware will command a p-e of at least 18.

As for the "new" Premark, sales will total $2.3 billion when split from Tupperware, with estimated earnings of $1.40 a share, figures Doyle. Premark should then trade at a p-e of 13, or a value of around 18 a share.

David Boczar of Value Investing Partners, expects the spin-off to be announced in late May or early June. Premark's goal over the next two years, he says, is to increase operating margins to 10%. Its domestic food equipment and appliance units have such margins, he notes. But Premark's flooring, tile, and exercise-equipment businesses are lagging behind. With the spin-off, Premark should be able to focus more on these units.

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