In Search of Auction Stocks

Here is some auction trivia. What is the auctioneer company that handled the liquidations of former high-flying companies Webvan, Enron, and Napster (NAPS) after the dotcom bubble burst? The answer is DoveBid, a privately held Los Angeles based company which was founded in 1937.

Auction stocks, whether ‘bricks and mortar,’ or online, are hard to find. There are dozens of online auction sites but few that are publicly traded. As a matter of fact, Yahoo Auctions, used to be an important commerce service of Yahoo (YHOO), along with Yahoo Autos and Yahoo Shopping. However, June is the shutdown month for Yahoo Auctions in the United States and Canada, with June 3, 2007 being the last day to place a listing.

The largest online auctioneer is obviously the world famous eBay (EBAY), which trades on NASDAQ. In September 1995 eBay was founded by Pierre Omidyar, a computer programmer as AuctionWeb. The urban tale that eBay was started by Omidyar in order to sell his fiancée’s PEZ Candy dispensers was a story created by a PR manager. Actually, the first item that was sold on eBay was a broken laser pointer. eBay’s most valuable asset is Paypal, considered to be the largest online money transfer company in the world. It has a P/E of 37, a forward P/E of 21, and has a PEG of 1.2.

Since Christie's went private in 1999, Sotheby's (BID) is now the largest publicly traded fine art auctioneer. The stock trades on the New York Stock Exchange with a great personalized stock symbol: B I D. It is the world's second oldest international auction house, founded in 1744. It has a PE of 21, a PEG of .9, and pays a small yield of .9%. Its quarterly revenue growth year over year was 53.5%.

Overstock.com Inc. (OSTK) is primarily an online marketer of surplus, returned, and new merchandise. In addition, it has a small auction division and has also hosted several charity auctions. Its quarterly revenue growth has dropped by over 12% and it is generating negative earnings.

Amazon.com Inc. (AMZN), which trades on NASDAQ, is very borderline auction company, as auctions makes up a very small portion of its total business. As a matter of fact, I had a hard time even finding the auction section, and the categories I clicked on didn’t have any bids on the listed items. But Amazon is a very, very successful marketer of not just books but just about every type of consumer product. It has a forward P/E is 56 and its PEG is 2.7. Its quarterly earnings were up 117% on quarterly revenue growth of 32%.

Disclosure: The author owns YHOO and EBAY.