Trade-Ideas: Sothebys (BID) Is Today's Post-Market Leader Stock

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

Trade-Ideas LLC identified Sothebys ( BID) as a post-market leader 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 $58.6 million.
  • BID is up 2.5% today from today's close.

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More details on BID:

Sotheby's operates as an auctioneer of authenticated fine art, decorative art, and jewelry. The company operates in three segments: Auction, Finance, and Dealer. The stock currently has a dividend yield of 0.8%. BID has a PE ratio of 34.0. Currently there are 2 analysts that rate Sothebys a buy, 1 analyst rates it a sell, and 1 rates it a hold.

The average volume for Sothebys has been 1.3 million shares per day over the past 30 days. Sothebys has a market cap of $3.4 billion and is part of the services sector and specialty retail industry. The stock has a beta of 2.48 and a short float of 13.7% with 8.09 days to cover. Shares are up 49.5% year to date as of the close of trading on Friday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Sothebys as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, expanding profit margins, good cash flow from operations and increase in net income. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 10.1%. Since the same quarter one year prior, revenues slightly increased by 0.3%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • The current debt-to-equity ratio, 0.50, is low and is below the industry average, implying that there has been successful management of debt levels. To add to this, BID has a quick ratio of 1.56, which demonstrates the ability of the company to cover short-term liquidity needs.
  • The gross profit margin for SOTHEBY'S is rather high; currently it is at 61.78%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 30.08% significantly outperformed against the industry average.
  • Net operating cash flow has increased to $259.00 million or 35.43% when compared to the same quarter last year. In addition, SOTHEBY'S has also vastly surpassed the industry average cash flow growth rate of -83.96%.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the Diversified Consumer Services industry average, but is less than that of the S&P 500. The net income increased by 7.4% when compared to the same quarter one year prior, going from $85.43 million to $91.73 million.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12-months. Learn more.
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