Institutional Holdings in Sirius XM on the Rise
Sirius XM has seen institutional ownership rising over the past several quarters, and the latest report from NASDAQ shows that the company is 37.89% owned by institutions. Of the 3,946,383,454 shares out there, over 1,495,440,035 are held by the big boys. Further, consider that Liberty’s preferred shares equate to 40% of the company. If converted, and the issued shares from that conversion considered, the institutional ownership would be closer to 59%
The activity in the institutional holdings sector has been robust:
- 356 Institutions hold positions.
- 48 New positions representing a change of 148,368,197 shares
- 145 Institutions INCREASED their stake representing a change of 389,667,007 shares
- 121 Institutions DECREASED their stake representing a change of 195,456,062 shares
- 266 Institutions had activity with their stake representing 585,123,069 shares
- 26 Institutions Sold Out of their Positions representing 28,531,564 shares
What we see happening here is bigger players getting more involved, increased positions outweighing decreased by a factor of 2, and those exiting their positions being smaller institutions. As institutional ownership in an equity rises, it tends to help the stock price appreciate. This happens because institutions tend to buy in large blocks and hold their shares. The effect is that the supply of shares on the market, in theory, gets more scarce. The laws of supply and demand then take over. If demand is high, either from retail investors or institutions, and supply is being restricted by the big boys, the price can appreciate. The real magic tends to happen when institutional ownership approaches 50% and then beyond.
Combine large institutional ownership restricting share supply with the potential that Sirius XM could be buying back shares next year and the result can be quite impressive. It is a great feeling to know that watching the level of institutional ownership is finally becoming a more an more important issue when tracking Sirius XM.
Position – Long Sirius XM Radio
How are you calculating the 55%?
Simple weighted-average would appear to reflect 62.73%
If liberty holds 3.9 billion shares and institutions 1.4 billion our of 9 billion authorized, it comes out to 59%. It was a typo and I will correct it. Thanks for the heads up.
Nice article Spencer, I just have a question in regards to institutional stock purchases… Why is it that there are some people talking about restrictions for companies in buying shares in stocks under $5… Are they really not able or is it something to do with too much risk involved?
Most institutions are govererned by rules they set up that dictate certain parameters for what they can and can not invest in. There are many institutions with a $5 rule, but also many that do not have such a rule
Exactly. This + SatRad 2.0 + increases in auto sales + the death of internet radio and SIRI is headed to at least $3 by Dec.
beensirius….
Not to rain on your parade, but internet radio is not going to die. It is here and always will be. In fact, last month Internet radio listenership and time spent listening rose once again.
Just because Internet radio will be around does not mean Sirius XM will suffer, but it will impact things such as pricing.
People need to stop saying that Internet and Terrestrial will die off. They wont
But satellite radio will continue to take listeners from Terrestrial radio and internet radio companies will never make a $ and tehy will start dying off little by little because there is no business model that will work as an exclusive business.
Sorry to rain on you parade Spencer.