In short: The featured special situation — "very, very compelling after an acquisition." A severe disconnect: EBITDA ~2.0B pesos (2024) → ~4.3B (2027E) while EV/EBITDA compressed 30% to 3.8× 2027E (NTM EBITDA estimates +50% in a year); converts >80% of EBITDA to FCF (~3B pesos on an ~11B cap = a high-20s% FCF-to-equity yield) and pays an 8.6% dividend (~$0.36/qtr), its 26th consecutive quarter. Tupperware LatAm contributed 11% of revenue / 16% of EBITDA in its first consolidated month → pro-forma TTM EPS +36%; leverage 1.6× (from a brief 2.6×); 2026 guidance raised from 4.8% to 18-22% growth at >19% EBITDA margins. The mispricing: the Wall-Street "direct-selling discount" (3-6× EV/EBITDA on distributor-churn fear), EM/FX optics, and post-deal digestion noise.
Betterware sells household goods — kitchenware, storage, cleaning products, personal care — in Mexico through a direct-selling network: an army of independent distributors who sell to friends and neighbors, Tupperware-party style. Last year it actually bought Tupperware's Latin American business, which is why the numbers are moving so fast.
The setup Singh likes is a rare one: the business is getting dramatically better while the stock gets cheaper. Profits (EBITDA) are on track to roughly double from about 2 billion pesos in 2024 to 4.3 billion by 2027, yet the price investors pay per unit of profit has fallen 30%, to under 4× — the kind of multiple you pay for a business in decline. More than 80% of those profits turn into actual cash, which funds a dividend yielding 8.6% that has now been paid 26 quarters in a row. Tupperware chipped in 11% of revenue and 16% of profit in its very first month inside the company, and management thinks combined earnings are 36% higher than the standalone business.
Why is it this cheap? Wall Street reflexively discounts direct-selling companies (it fears the distributor network churns), it's an emerging-market stock, and the acquisition only just closed so nobody has confirmed the cost savings yet. Those three excuses are the mispricing.
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