Could Sotheby's (BID) Strong Auction Results Be a Sign of an Art Market Recovery?

Shares of Sotheby's (NYSE: BID) have rallied as much as 11% today, setting a new 52-week high at $19.50. The strong price action comes on the heels of a very successful contemporary art auction in New York last night.

Following a rough 2009, sentiment related to the art market has remained depressed. Given yesterday's solid auction results, however, investors and collectors alike may be taking another look at their outlook for this niche market.

Out of 54 lots, all but 2 sold. Total auction sales came in around $134 million -- more than 50% higher than what aficionados had been expecting the auction to bring in. Among some of the top sellers: Andy Warhol's "200 One Dollar Bills" and self portrait sold for $43.76 million and $6.13 million, respectively, Jasper John's "Gray Numbers" sold for $8.7 million and Jean Dubuffet's "Trinite-Champs-Elysees" sold for $6.13 million.

Possibly also adding to today's upside (and certainly reassuring investors), a JPMorgan analyst made comments saying that the auction could be "a sign of an art market recovery" and that Sotheby's may now be stealing market share from its top competitor, Christie's. The firm presently has a Neutral rating and $20 price target on shares of Sotheby's.

Now well of session highs, shares of Sotheby's are still hanging onto positive territory. The stock most recently traded at $18.38, currently up 4.7% from yesterday's close.

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