Sotheby's: A Luxury Stock To Buy On An Economic Recovery

Sotheby share price (BID) is volatile, as it might appear on its performance in recent years. To trade around $ 57 in 2007, it increased to 6 million in 2008 to $ 52,000,000 in 2011 again. Is currently at $ 31 and is up 11.6% compared to last month. The company missed analyst estimates for EPS and revenue in Q2 2012 results recently. This is the fourth consecutive quarter, the result is accurate. In the short term, the stock is not looking because of the economy attractive, but in the long term, we are optimistic about the IDB. Financial Performance: Hermes Kelly 32CM Handbags The company reported EPS of $ 1.24, missing estimates of $ 1.49. Last year, EPS was $ 1.81 Q2, which means a decrease of 31%. Sales of $ 304 million increased by 18% (year on year) and missed estimates of $ 336 million. The company is mainly the fault of the poor economic performance in the quarter. The company has a high beta of 2.36. The economic slowdown in Asia (especially China) and low demand in Europe is a matter of concern for the company, like many other luxury retailers also cautious. Comments on companies in these regions The company said that the top end of the market is still strong, despite the economy, the Asian market is still very profitable. The company's turnover is derived from auctions, trade and credit to Art. Approximately 95% of sales came from auctions in Q2 2012th Revenues from commissions auction down to a decrease of $ 250 million in sales individual entrepreneurs, compared with a record quarter last year. Auction commissions were also competing for about 1 percentage point due to more lucrative offers, and due to the sales mix. Income from loans for the best results with a jump of 44% of sales, which show that homeowners are increasingly relying on pictures of the liquidity reserve. Private sales of 40 million euros in the first half of 2012 are stable and healthy. Operating expenses increased by 8% in the second quarter and declined 3% for 1H 2012th Due to the low interest rates, management should refinance the convertible senior notes and more expensive with lower interest debt. One of the measures of the price of its $ 300,000,000 senior unsecured notes due 2022 and the rate of 5.25% senior notes to be replaced due to 7.75% in 2015. With cash of $ 8 per share, the company check, dividend increases and share buybacks if liquidity remains strong. Currently, the company pays a quarterly dividend of $ 0.08/share. This represents a dividend yield of 1.1% with a wage of 16%. The dividend is sustainable for now as cash on hand. However, the yield of free cash flow (12 months) is only 0.4%. Overall, the company flight on annual gross margin, operating margin and net profit margin are better than their average of 5 years, which means that the company shows to manage short-term scenarios difficult cases well and it is good for long term investment. Rating: The average target price is $ 34. In a previous P / E of 14x EPS and $ 2.22 expected in 2013, is the price to $ 31, $ 41 or up to 52 weeks. Pairs of the company and Christie Phillips, de Pury & Company are private companies, their manifold and therefore can not be used for comparison. Analysts expect a 18% increase in income per year over the next 5 years. The company is one of the auction houses and is a good buy on the economic recovery, when the company in Asia and Europe to be recovered.