Are Investors Undervaluing Sotheby's (BID) Right Now?

While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.

Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.

On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.

One stock to keep an eye on is Sotheby's (BID). BID is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock holds a P/E ratio of 15.18, while its industry has an average P/E of 21. Over the past year, BID's Forward P/E has been as high as 24.20 and as low as 15.18, with a median of 20.05.

Another valuation metric that we should highlight is BID's P/B ratio of 3.71. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. BID's current P/B looks attractive when compared to its industry's average P/B of 6.28. Over the past year, BID's P/B has been as high as 5.40 and as low as 3.71, with a median of 4.66.

Finally, investors will want to recognize that BID has a P/CF ratio of 17.35. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 23.54. Over the past year, BID's P/CF has been as high as 22.72 and as low as 17.14, with a median of 19.56.

These are only a few of the key metrics included in Sotheby's's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, BID looks like an impressive value stock at the moment.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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