Sotheby’s (BID) just hit a new 52-week high on the company’s better than expected Q from early March that were driven by a rebound in the global economy.
Sotheby’s, together with its subsidiaries, operates as an auctioneer of fine and decorative art, jewelry and collectibles in the United States, China, the U.K. and France. The company was founded in 1744 and has a market cap of $1.95 billion.
Sotheby’s business took a hit in the weak economy of 2008 and early 2009 as wealthy individuals scaled back on high-Dollar expenses. But with a big equity rebound in hand and optimism abound, the company’s results have once again perked up, on display with better than expected Q4 results from March 1.
Revenue was up 31% from last year to $218 million. Earnings came in very strong at $1.10, 64% ahead of the Zacks Consensus Estimate. Sotheby’s results were driven by revenue gains and an expansion in auction commission margin to 20.4% from 16%. The company has also been very focused on cutting costs, with expenses down 28% from last year, which translates into an eye-popping $47.5 million.
CEO Bill Ruprecht noted that the company is off to a hot start in 2010, saying that, “The momentum has continued into 2010. It would have been impossible to imagine these results just one short year ago.”
The analysts are optimistic on Sotheby’s, raising estimates on the good quarter. The current year is up 37 cents in the last month to 92 cents. The next-year estimate is up 25 cents to $1.40, a bullish 52% growth projection.
After the string of gains, shares of SBY are a bit pricey, trading with a forward P/E of 32X, a premium to the overall market.
Michael Vodicka is the Momentum Stock Strategist for Zacks.com. He is also the Editor in charge of the market-beating Zacks Surprise Trader Service. Zacks Investment Research