SIRI… SIRIously?
Yes, a horrible pun, but a strong stock.
Yes, a horrible pun, but a strong stock.
I’ve noticed a bit of a buzz on SIRI (Sirus XM radio for those of you who live under a rock or have just abandoned their Amish roots). I want to address why the buzz, why now, and what does SIRI need to become a great growth stock?
Why the buzz
SIRI has been a constant headliner in the stock market world. It has a gigantic market cap for a penny stock (I consider a penny stock to be anything under about $2.00 a share). People see the fundamentals and they get bullish. Why then isn’t this stock trading above $5.00? Well, it used to…
The SIRI bulls note a few things:
Market Cap = about 6.64 BILLION (pretty good for a stock that closed today at $1.77)
Market Cap = about 6.64 BILLION (pretty good for a stock that closed today at $1.77)
Low price = $1.77
High institutional ownership= about 42%
Recent history = coming off a very low period
But the SIRI Bears have some good points too:
SIRI is low in price, but follows the general market trend (Beta = about 2). The Beta means that when the market goes up, SIRI goes up and when the market goes down, SIRI goes down. However, because of its low price, it has the potential for penny-stock volatility, which is a roller coaster that makes most traders sick.
SIRI is low in price, but follows the general market trend (Beta = about 2). The Beta means that when the market goes up, SIRI goes up and when the market goes down, SIRI goes down. However, because of its low price, it has the potential for penny-stock volatility, which is a roller coaster that makes most traders sick.
Also: history. SIRI has a nasty history. If you don’t remember the SIRI-short-$h!tshow of recent history, check out the informative (but highly biased) documentary Stock Shock, about how SIRI’s price was inflated, deflated, and largely manipulated in the markets which resulted in an unfair valuation of the stock. But if you just do some light Google searching on SIRI, you'll see that they have news every day.
But, in all honesty, fundamentals are good for going long into a stock but technicals are good for short holds.
Long term, there is great agreement that SIRI is a hold.
The Trefis estimate has SIRI at $2.11 which is a significant increase from the current high.
A recent post put SIRI at $2.46 by an average of all available estimates.
This represents a gain of almost 36% and places SIRI as one of NASDAQ’s top gainers.
The Trefis estimate has SIRI at $2.11 which is a significant increase from the current high.
A recent post put SIRI at $2.46 by an average of all available estimates.
This represents a gain of almost 36% and places SIRI as one of NASDAQ’s top gainers.
Am I in SIRI? You bet. Long. I rarely invest long.
BUT
Recent car sales are increasing, the general economy is coming around, and SIRI is offering unique products that make its subscriptions grow year after year. Will it go back to its former glory? Will we see $10.00? I would love that, but I’m not holding either my breath or my stock higher than $2.50 for the time being.
Also, as always:
ReplyDeleteI'm not an investor, not a registered advisor. Only a researcher interested in the minds of finance. Nothing I write here should be taken as a suggestion to buy or sell any stock or financial instrument regarding any company mentioned.