Barbarian At The Gate: Sothebys (BID)
Trade-Ideas LLC identified
(
) as a "barbarian at the gate" (strong stocks crossing above resistance 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 $25.9 million.
- BID has traded 2.6 million shares today.
- BID traded in a range 348.7% of the normal price range with a price range of $2.61.
- BID traded above its daily resistance level (quality: 5 days, meaning that the stock is crossing a resistance level set by the last 5 calendar days. The resistance price is defined by the Price - $0.01 at the time of the signal).
Stocks matching the 'Barbarian at the Gate' 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 positive price action. In this case, the stock crossed an important inflection point; namely, 'resistance' while at the same time the range of the stock's movement in price is more than twice its normal size. This large range foreshadows a possible continuation as the stock moves higher.
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More details on BID:
Sotheby's operates as an auctioneer of authenticated fine art, decorative art, jewelry, wine, and collectibles in the United States, the United Kingdom, China, France, Switzerland, and internationally. The company operates through two segments, Agency and Finance. The stock currently has a dividend yield of 1.5%. BID has a PE ratio of 43. Currently there are no 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 1.2 million shares per day over the past 30 days. Sothebys has a market cap of $1.7 billion and is part of the services sector and specialty retail industry. The stock has a beta of 1.76 and a short float of 16.9% with 8.55 days to cover. Shares are up 5.9% year-to-date as of the close of trading on Friday.
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Analysis:
rates Sothebys as a
. Among the primary strengths of the company is its expanding profit margins over time. At the same time, however, we also find weaknesses including a generally disappointing performance in the stock itself, deteriorating net income and disappointing return on equity.
Highlights from the ratings report include:
- Regardless of the drop in revenue, the company managed to outperform against the industry average of 13.4%. Since the same quarter one year prior, revenues slightly dropped by 4.4%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- The gross profit margin for SOTHEBY'S is rather high; currently it is at 54.38%. Regardless of BID's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of -3.32% trails the industry average.
- SOTHEBY'S has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. The company has reported a trend of declining earnings per share over the past two years. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, SOTHEBY'S reported lower earnings of $0.60 versus $1.68 in the prior year. This year, the market expects an improvement in earnings ($1.80 versus $0.60).
- Net operating cash flow has decreased to $251.71 million or 14.40% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 36.75%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 116.03% compared to the year-earlier quarter. Although its share price is down sharply from a year ago, do not assume that it can now be tagged as cheap and attractive. The reality is that, based on its current price in relation to its earnings, BID is still more expensive than most of the other companies in its industry.
- You can view the full Sothebys Ratings Report.
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