Sotheby's Earnings Preview (BID)

On Monday after the closing bell, venerable auction house Sotheby's BID will be reporting their quarterly earnings results. The company is expected to report earnings per share of $1.32 on revenues of $297.96 million. In the year ago quarter, BID reported EPS of $0.67 on revenue of $218.28 million, so the company is showing strong year over year growth trends and momentum in their business. In many ways, Sotheby's is a perfect stock for economic and stock market optimists. Investors who believe that the economy and the market are on the cusp of a substantial upswing may want to look into this company a little bit deeper. While BID was hit extremely hard during the recession, the stock has been a tremendous performer over the last year, gaining around 100%. During the absolute worst of the financial crisis, BID shares traded below $6.50. The stock is now valued at above $48.00. The all-time high in Sotheby's is above $56.00, which was hit in 2007, a time when hedge fund managers and real-estate moguls were bidding up the art market like the Nasdaq in 1999. If you believe that these former days of excess will make a comeback sooner than is currently expected, BID is a good way to play that thesis. The median Wall Street price target on the stock is $51.60 with a high target of $54.00. The stock trades at a trailing P/E of 23.58, a forward P/E of 18.13, and a PEG ratio of 1.16, all of which seem reasonable. At current levels, the stock offers a dividend yield of 0.40%. BID shares are trading well above both their 50-day and 200-day moving averages, which are at $44.07 and $39.67, respectively. The company has a market cap of $3.25 billion.