While Fools should generally take the opinion of Wall Street with a grain of salt, it's not a bad idea to take a closer look at particularly stock-shaking upgrades and downgrades -- just in case their reasoning behind the call makes sense.
What: Shares of Sotheby's (NYSE: BID ) climbed 2% in early trading after Citigroup upgraded the auction house to "buy" from "neutral."
So what: Along with the upgrade, analyst Oliver Chen boosted his price target on the stock to $55 per share (from $45), representing about 16% worth of upside to yesterday's close. Chen cited several potential catalysts for the call, including the potential sale of its headquarters, a return of capital to shareholders, and even a possible leveraged buyout.
Now what: At the very minimum, I expect management to make some strategic tweaks and start focusing on less expensive goods. "Sotheby's current focus on high-end property may leave the company vulnerable to competition on commission margins and sellers of high-end property could be more likely to leave the market during pullbacks which exposes Sotheby's to greater volatility," Chen said. So while the stock is hitting a new 52-week high today, Citigroup's price target doesn't seem all that unreasonable given the many number of potential catalysts working in Sotheby's favor.
Stocks for the long term
Dividend stocks can make you rich. It's as simple as that. While they don't garner the notoriety of high-flying growth stocks, they're also less likely to crash and burn. And over the long term, the compounding effect of the quarterly payouts, as well as their growth, adds up faster than most investors imagine. With this in mind, our analysts sat down to identify the absolute best of the best when it comes to rock-solid dividend stocks, drawing up a list in this free report of nine that fit the bill. To discover the identities of these companies before the rest of the market catches on, you can download this valuable free report by simply clicking here now.
No comments:
Post a Comment