Just a week after Christie's sold a Eduoard Manet painting for a record $65 million, Sotheby's sold one of Jasper Johns'"Flag" paintings for $36 million at an auction on Tuesday. That was a record for Johns, but on the whole, the auction itself was lackluster for Sotheby's.
Sotheby's did just $344 million of sales in the auction, near the bottom of the estimated range between $323 million and $419 million.
And as a matter of fact, Sotheby's stock itself has also been on the lower-end of its 52-week price range. Though trading above the 2014 low it hit at the beginning of October, the shares are still way off of the high of $53.74 set in early January. Sotheby's shares are down 22percent in 2014.
Yet according to one investment manager, Sotheby's stock may soon be worth bidding on once again.
Erin Gibbs, equity chief investment officer at S&P Capital IQ Global Markets Intelligence, credits the efforts of activist investor Dan Loeb of Third Point for pushing the company into making moves that would make the stock more attractive.
"Dan Loeb had a great quote saying Sotheby's is 'like an old master painting in desperate need of restoration,'" Gibbs said. "After a few months of some contentious words between Dan Loeb and Sotheby's, there are some signs that restoration is finally starting."
Though Gibbs calls Sotheby's New York auction and its auction several weeks ago in London "middle of the road," she applauds the company's share buybacks, dividend increases, and cost-cutting efforts.
Sotheby's approach to marketing has also changed, according to Gibbs, who has about $12 billion in assets under advisory. They are "also focusing on younger collectors, really modernizing it," she said. "They've done that with some initial auctions paired with eBay."
"We're starting to see Sotheby's become more investor-friendly," Gibbs added. "It really was rather investor-unfriendly up until Dan Loeb came in. So I like the stock here."
The technicals also paints a portrait of higher prices, according to the chart work of Steven Pytlar, chief equity strategist at Prime Executions.
Pytlar said the stock's technical reversal came in August, when the stock "gapped down" to around $35.70. (A "gap down" is when the range a share trades is below its previous day's lows, potentially indicating a large amount of selling.)
That support level remained relatively intact when it was once again tested in October. "That means that there is very strong accumulation, more buyers than sellers at that level," Pytlar said. "What we call that is a double bottom. Technically that's a very positive signal."
The stock is likely headed up toward resistance at $42.55, Pytlar said. "Buyers are back in control. We would expect this chart to head higher given these developments."