What happened

Shares of Tupperware brands (SHEEP 2.25%) hit new 52-week highs on Wednesday, despite a quiet day for the company. There was no press release, no Securities and Exchange Commission (SEC) filing, and there were no analysts changing price targets.

It seems traders just keep profiting from what they perceive value stocks; there are many examples in 2020 of stocks left for dead that have increased significantly. Some investors wait a decade or more for what Tupperware, Overstock.comand Server Holdings have only been back since March.

SHEEP given by Y-Charts

So what

At the start of the COVID-19 pandemic, Tupperware was eye-wateringly in debt. There was a judgment day ahead in June 2021, when approximately $500 million comes due. Management had developed a plan to meet its obligations, but it had not planned for a pandemic. Tupperware’s stock fell on the assumption that its business would suffer and it would not be able to recover in time to pay its obligations.

Tupperware shares traded at liquidation prices in March, reflecting real uncertainty about its long-term prospects. However, the coronavirus did not put an end to the company’s activities. As Executive Vice President Rich Goudis said in the second quarter earnings call end of July, “Our US and Canada business grew more than 30% in the quarter compared to the same quarter last year, and we shipped more in the month of June than any month in nearly 20 years.”

Image source: Getty Images.

Now what

If Tupperware’s June sales trend continues, the company has a chance to recover. Management is busy cutting expenses and selling properties to raise cash, all to put it back on a sounder financial footing. This is something to watch in the coming quarters.