The shares have fallen 26% this year on disappointing earnings and concerns about whether slowing global growth could hurt the art market. At 16.1 times forward earnings expectations, the stock trades at a discount to its 19.1 historical average and to stocks like Tiffany (TIF) also tied to the luxury trade, Barron's said in a feature article over the weekend.
Sotheby's is "like an Old Master painting in desperate need of restoration," activist investor Daniel Loeb wrote to the company last year. After a contentious few months, that restoration work seems to have begun, Barron's said.
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Since Loeb's October 2013 letter, Sotheby's has grown more shareholder-friendly, releasing more information, starting a stock buyback program, paying out more of its earnings via a hefty special dividend, and generally becoming more assertive with its balance sheet. It was already considering plans to sell its valuable New York and London real estate, Barron's noted.
The company's core business and its duopoly with rival Christie's remain as formidable as ever. And Sotheby's has growth opportunities, including a new partnership with eBay (EBAY) to run online auctions, Barron's added. The stock closed at $39.66 on Friday.