Technically Speaking SIRI In A Good Place
Sirius XM has spent several weeks trading above key support levels, but as yet has been unable to break free despite hitting the 20 million subscriber mark, renewing the NFL deal and the highly anticipated contract for key radio personalty Howard Stern. While all of this is great news, the stock has essentially been treading water, seeming waiting for the financials to prove out.
The positives are that the equity has more attention from analysts who are more positive on the outlook, and the company appears to be on pace to meet or exceed their 2010 guidance. These positives have helped to keep the stock trading above key support levels at $1.28 and it has not even really come close to dropping there. What this means is that there is new support being established as each trading day passes, and that can be a good foundation for upward momentum. Running up on news is great. Going up on company merits is better.
Resistance for SIRI and a possible upward target sits at about $1.57. This would represent about a 10% upside vs. a 10% down side to the $1.28 level on a current trading level of $1.42. While this may seem like things could go either way, we must now consider what is ahead in the news cycle.
The Consumer Electronics Show will be happening in about two weeks, which could possibly give new insight on the upcoming and highly anticipated Satellite Radio 2.0. The company could well deliver subscriber numbers shortly after the new year, and in fact would be very likely to let the street know the status on the 2010 guidance far earlier than when they report their year end numbers in February.
The combination of Satellite Radio 2.0 and positive company metrics should be powerful enough to allow the stock to run toward new highs. If you are looking for a run to $2.00 you will need to be patient. In my opinion the positive catalysts will keep the stock stable with a bias to the upside as time passes. A realistic goal would be a 10% to 15% rise from current levels in the coming 3 months. While this may disappoint some, we are at the end of this equity popping on an OEM or content press release. It is now all about the numbers, and those will be vetting out throughout the first couple of quarters in 2011.
Bottom line is that as a Sirius XM investor you need to now understand patience now. Sirius XM is becoming a more stabilized equity. Quick scores will be found elsewhere for the time being.
Position – Long Sirius XM Radio
“quick scores will be found elsewhere.”
Good! Siri has had enough volatility. We don’t need anymore big moves that just get shorted.
I’ll take the cotton picken nickel program of solid 5 cent moves on a regular basis.
Then again, Goldman Sachs could always hire the North Koreans to “accidentally” shoot down our constellation of uninsured satellites (“we were aiming at South Korea and missed”). The tip-off, of course, will be Mark Wienkes resuming coverage with a “Conviction Sell” rating.
I still got my eye on you Wienkes 😉
btw Spence, I like the notion of Stern being treated as “personalty” . . sort of like an indentured servant of shareholders if you will . . .
We could get to 1.90 in a hurry between now and Feb CC and take out the converts.
Sorry spencer, but you though the stock was fairly valued at 1.10 when it was hitting 1.60.
sxminvestor…..
The stock ran a spike to $1.60 and came right back down. When I stated it was fairly valued it was at that point in time absent the quarterly data, etc. The company proved out that they are still hitting numbers, and thus the stock could move. If you recall I most recently stated that I felt the stock would run to $1.50 and then retrace but hold the $1.30’s. That was exactly what transpired
I do not agree with you Spencer until we know how much SIRI has paid Howard stern, and the NFL and the 2011 guidance we will still be in the dark seeking direction.
Spencer,
I hope in 2011 you will be a little bit less conservative. I believe that you know about siri much more than mmost of the others. This should give you the basis to be more optimistic. I agree that 2011 is not going to be a stellar year for siri but it will be a strong, consolidation year with auto sales going up, interest expense and capex going down, revenue, EBIDTA and fcf increasing significantly and further proving of their business model. During this year siri will accumulate huge momentum for a blow-out 2012. I also believe that siri will adjust its pricing in 2011 and we will feel the full impact of this reasonable price increase in 2012 and on, let alone the impact of sat radio 2.0. I also hope that Mel and Co will announce 5-year projections and possibly dividend or buy back plans for 2012 and on. In my view, sirius does not need to prove anyone anymore that it is not only a viable but also great business with unbeatable business model. They have cleared all imaginable and unimaginable hurdles and are out of the woods extremely strong. Mel has been so far as good as his word and we should never discount his magic. We have every reason to anticipate their share price at $2 to $3 in 2011 with a significant boost in 2012.
Good call Spencer…but i do like that fact that we hit that 1.57 and broke through today. I belive $2 by Jan is clearly possible. LONG SIRI!!!
We are about to break the 52 weeks high today, if the stocks closes above $1.61 we will be over $1.8 before the end of 2010
Lets wait and see how it goes.
The quickest score was Sirius the last 2 days..what are you talking about ?
What about the elephant in the room, Malone?
He ia a friendly elephant