Sothebys (BID) Is Today's Water-Logged And Getting Wetter Stock
Trade-Ideas LLC identified
(
) as a "water-logged and getting wetter" (weak stocks crossing below support with today's range greater than 200%) candidate. In addition to specific proprietary factors, Trade-Ideas identified Sothebys as such a stock due to the following factors:
- BID has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $33.1 million.
- BID has traded 384,871 shares today.
- BID traded in a range 356.6% of the normal price range with a price range of $3.13.
- BID traded below its daily resistance level (quality: 3 days, meaning that the stock is crossing a resistance level set by the last 3 calendar days. The resistance price is defined by the Price - $0.01 at the time of the signal).
Stocks matching the 'Water-Logged and Getting Wetter' criteria are worthwhile stocks to watch for a variety of factors including historical back testing and volatility. Trade-Ideas targets these opportunities because the stock is exhibiting an unusual behavior while displaying negative price action. In this case, the stock crossed an important inflection point; namely, "support" while at the same time the range of the stock's movement in price is twice its normal size. This large range foreshadows a possible continuation as the stock moves lower.
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More details on BID:
Sotheby's operates as an auctioneer of authenticated fine art, decorative art, and jewelry in the United States, the United Kingdom, China, France, Switzerland, and internationally. It operates through three segments: Agency, Principal, and Finance. The stock currently has a dividend yield of 1.2%. BID has a PE ratio of 19. Currently there are 3 analysts that rate Sothebys a buy, no analysts rate it a sell, and 2 rate it a hold.
The average volume for Sothebys has been 1.0 million shares per day over the past 30 days. Sothebys has a market cap of $2.3 billion and is part of the services sector and specialty retail industry. The stock has a beta of 1.49 and a short float of 17.3% with 10.45 days to cover. Shares are down 21.1% year-to-date as of the close of trading on Friday.
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Analysis:
rates Sothebys as a
. The company's strengths can be seen in multiple areas, such as its good cash flow from operations and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, generally higher debt management risk and disappointing return on equity.
Highlights from the ratings report include:
- Net operating cash flow has slightly increased to $211.06 million or 3.17% when compared to the same quarter last year. In addition, SOTHEBY'S has also vastly surpassed the industry average cash flow growth rate of -352.26%.
- The gross profit margin for SOTHEBY'S is rather high; currently it is at 54.14%. Regardless of BID's high profit margin, it has managed to decrease from the same period last year.
- Regardless of the drop in revenue, the company managed to outperform against the industry average of 1.3%. Since the same quarter one year prior, revenues slightly dropped by 1.1%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Diversified Consumer Services industry and the overall market on the basis of return on equity, SOTHEBY'S has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
- Reflecting the weaknesses we have cited, including the decline in the company's earnings per share, BID has underperformed the S&P 500 Index, declining 17.14% from its price level of one year ago. Looking ahead, other than the push or pull of the broad market, we do not see anything in the company's numbers that may help reverse the decline experienced over the past 12 months. Despite the past decline, the stock is still selling for more than most others in its industry.
- You can view the full Sothebys Ratings Report.
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