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  1. OldDruid is offline
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    03-07-2009, 06:03 PM #11
    I copied this fron NEWMAN's post on another thread as it describes the basis of where I think we may be in 6 months:
    Quote Originally Posted by Newman
    If you want to look at it by numbers:

    Assuming NO more dilution, and NO R/S, the company has projected FCF of 1 billion dollars in 2012. Using a 6.5 billion share float (to include current dilution from the 40% stake of Malone), this would equate to 0.15 earnings per share. So, in other words, Sirius XM is currently trading at a 2012 Forward PE ratio of 1:1. What type of ratio seems appropriate for Sirius in your opinion?
    I would be thrilled with a Forward PE of 4:1 in six-nine months. In the current global meltdown conditions we find ourselves in, Forward PE of 2 to 3:1 seems more realistic. That is to say 0.30 to perhaps 0.45, given that there are no extreme supprises, up or down.
    Mkt Cap: 2.275 to 3 billion, just my guess of where it might be in 6 months.
    Last edited by Newman; 03-07-2009 at 08:00 PM. Reason: left out mkt cp est. Edit by Newman: put in the quote tags for better viewing

  2. doctorex is offline
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    03-08-2009, 05:38 PM #12

    doctorex speaks:

    doctorex speaks:


    siri's eventual market cap depends on its establishment as an unassailable monopoly, which is currently happening. siri's service, i.e., unlimited content into a moving car with no ads, cannot be duplicated by any device or service. teen agers will pack their ipods, and listen to the same menu over and over, but the really prosperous grownup people will migrate to siri.

    this means that over the medium term the market will come to realize, correctly, that siri falls into the exclusive club of big monopoly names such as goog, msft, and ebay. these companies, in their growth phases, had extreme p.e. applied by the market. siri will be next.

    the monopoly provides the subscription growth, the monopoly provides the pricing flexibility (i.e., if the vendor is a monopoly, where else are you going to go?) and the monopoly releases siri from a lot of costs also, like duplicate admin. and marketing.

    let's make a few assumtions and a few calculations:

    presently 20,000,000 subs, arpu $10,

    therefore monthly rev. $200m, annual rev. $2.4b.

    expenses and financing annual $1b (unknowable at this time).

    therefore profit annual $1.4b.

    estimate p.e. 30 (low for a monopoly).

    therefore enterprise value: $42b.

    estimate common shares 6b after liberty converts.

    therefore estimate sp = $42b / $7b = $7.00.

    higher if subs are higher, higher after the price hike in two years, higher if expenses are lower, higher if p.e. is higher.

    look for possible $30 sp (optimistic but possible).


    doctorex has spoken.

  3. homer985 is offline
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    03-08-2009, 06:09 PM #13
    Profit of $1.4BB? Give it time -- gonna take SEVERAL years before you seen any kind of profit anywhere near there.

    Plus a PE of 30??? FWIW, the current PE average on the S&P500 is 12.3... down from the historic average of 16. In bear markets PE's are even known to drop to single digits. Yet you think a PE of 30 is proper -- even claim it to be low?

    Sorry, very much disagree. Try using a discounted cash flow model -- without such huge assumptions... and you'll see that a near-term EV (12 months) would be in the $10BB range max.



    -------

  4. asm610 is offline
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    03-08-2009, 06:26 PM #14
    Originally Posted by relmor2003
    Market sssmarket. Whats your fair value for SiriusXM right now, Homer? Lay it on the line. With the dilution. SP ==________

    Mine is .75 cents.
    You?
    In fact Id like to hear everybodies fair SP right now, based on information from this date only, and prior. Account for 6.88 shares outstanding. Market cap right now is____________

    I say its around 4 billion. And thats being conservative. Very very conservative. Why I dont exactly feel the R/S is 100 percent guaranteed. I think it will happen though.


    I am saying about 6 billion ...don't forget they have Brand New Satellite not launched yet and the licensing, improving technology, as well as improving sub based busines model ....95 cents share.

  5. OldDruid is offline
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    03-08-2009, 06:48 PM #15
    asm610..
    when you say @6billion, is that factoring in the current global meltdown, or is that based on 'normal' market conditions? In the past 18 months, the bears have beaten me so badly I have a hard time seeing through the haze. I think this company deserves a comparable P/E ratio, or better yet, a comparable P/Asset ratio to other companies. I just don't know if it will be possible near term (6-12 months) because of global conditions. I would be happy with your numbers.

  6. doctorex is offline
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    03-08-2009, 06:55 PM #16
    doctorex speaks:
    dear homer; you and i are not disageeing by much. assume an airtight monopoly and you may well get p.e. of 30 or greater, in the medium term anyway. also freedom from marketing and duplicate admin. costs. also cheaper price for the "talent" who cannot get a rival bid from xm. etc. etc. monopoly is what this is all about. i stick with $7.00 sp in the medium term. /s/ doctorex

  7. relmor2003 is offline
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    03-08-2009, 06:57 PM #17
    Quote Originally Posted by doctorex View Post
    doctorex speaks:
    dear homer; you and i are not disageeing by much. assume an airtight monopoly and you may well get p.e. of 30 or greater, in the medium term anyway. also freedom from marketing and duplicate admin. costs. also cheaper price for the "talent" who cannot get a rival bid from xm. etc. etc. monopoly is what this is all about. i stick with $7.00 sp in the medium term. /s/ doctorex
    Can I get some of what this guy is smoking?

    NOT BY MUCH!!!!!!!!!!!!!!!!!!!!!!!
    BLLALLAHAHHAHAHAAAA

  8. Wirestripper is offline
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    03-08-2009, 08:16 PM #18
    I say about $0.62 !

  9. john is offline
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    03-08-2009, 08:26 PM #19
    relmar, while I dont think the PPS could get as high as "doctorex" thinks it is possible for a surprise. I also think what he is saying is that there are still alot of cost that can and will be cut in the short term. I will just remind you that SIRI was FCF positive for the last half of 2007 if you take the FCF from the 4th Q into the 3rd Q, and that was with just over 8 million subs. Now Who here doesn't think Mel could have done the same with XMSR even without the merger. So take that and now include the merger. I still hold to the belief that once they get up to 40 to 50% of the synergies in, that they really dont need anymore subs to be profitable. Now if we get to 5 to 6 years and they are totally one company that 15 to 16 million subs would be enough for positive earnings from operations. Lets face it there really is no need for Opera and Martha and Barbbra. I could see things really changing in 2010.

  10. Wirestripper is offline
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    03-08-2009, 08:38 PM #20
    This is maybe a little off topic, but not much as it deals with the S&P 500 PE ratios currently.

    http://seekingalpha.com/article/1247...om?source=feed


    It appears Barron's is calling a bottom!

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