Sirius XM (NASDAQ:SIRI) relies heavily on the automobile channel to generate promotional subscriptions, and in turn self-paying subscribers. For this reason car sales and production numbers are important to not only the company, but those that invest in it. This sometimes means that the price of Sirius XM is impacted by news within the auto channel. Obviously, following the auto sector is paramount to Sirius XM investors. This is one of the reasons I created iKickTires.
Today JD Power released an early report on May auto sales that calls for the month to be weak in terms of auto sales. I reported the May auto sales news on iKickTires.
The auto sector analyst anticipates that the SAAR for May could be as low as 11.9 million. This is a stark retracement from the 13.2 million we saw last month. That is the negative news. The positive news is that they still see 2011 auto sales coming in at about 13 million units. Sirius XM investors armed with such information can anticipate the reaction to May sales with the understanding that the slump is temporary in nature.
The key is garnering, digesting, and understanding the information and how it will impact your investment short as well as long term.
Position - Long Sirius XM Radio