Lazard Downgrade – Not Really Negative
Now Sirius XM was approaching his $2.00 target. Crockett had two choices, he could lower the rating to NEUTRAL or he could raise the price target again. Ahead of earnings Crockett took the more conservative route, and now has an upgrade in hand.
Crockett calls Sirius XM’s growth story a success but also feels that that story is now widely known. To Crockett this means that the secret is out and that the issue is already discounted into the current price range. This could be a short term negative, but over time a huge positive. If some people see a growth story others may soon follow suit.
For institutional investors growth is growth. If Sirius XM can demonstrate that growth is still happening and destined to happen in the foreseeable future, major buying could be the result.
That being said, Crockett is a well respected analyst, and tends to have a very sound opinion. His other caps on upward momentum include a conservative opinion on the companies ability to raise prices, a cloud in the automobile sector due to the earthquake in Japan, and that Sirius XM’s guidance seems reasonable given these uncertainties. His stance on guidance seems reasonable to me. Sirius XM, in my opinion, will be hesitant to raise guidance for the exact reasons Crockett states. However, it is my belief that the company will report good numbers and express confidence in their current guidance.
Barton Crockett is timely in his reports. If he see’s a compelling reason to make a change, or his price target is near, he makes a new call. What will be interesting to see is whether or not Crockett makes a new call after Sirius XM’s earnings. Stay tuned. His current rating is NEUTRAL with a $2.00 target.
Position – Long Sirius XM Radio
Crockett is an idiot. You don’t get pts in life for being conservative. You get pts by making bold moves. He like Wundernuts are both behind the curve. Amboi Tuna (S&P) and Morgan Stanley Analyst are ahead of the curve. They are forward thinking analyst.
There are times to be forward thinking and times to be conservative. In certain markets conditions many people you may consider “forward thinking” look like idiots.
The fact is that over the last three months there has been a substantial increase in shares of SIRI. Unless there are substantial and provable reasons to foresee that pace to continue, there is good reason to take a pause as Crockett has done.
I would venture to say Crockett will be among the first to issue a report if SIRI numbers presented Tuesday dictate it.
SIRI is running up for a reason. Bold analyst like these called $2.00 and up many months ago & way before the run up: James C. Goss, John Tinker, Tuna Amobi, Barton Crockett, David Gober, Benjamin Swinburne, Vijay Jayant. Barton Crockett is shape changer, making his “predictions” as the stocks running.
Even with Japan auto part issues, there is a strong recovery in autos that will continue. Automakers are not waiting around for Japan to fix itself. They are making moves now, not wanting to miss the resurgence in autos. Demand for autos isn’t stopping either, even with high gas. People are just buying more fuel efficient cars.
Consumer Confidence is up. Employment is coming back. All these snowball into greater purchasing power which translates into more buying (ie. SiriusXM subscriptions.)
I’m not buying (pun intended) the economy is falling back over the cliff because of Japan, Libya, gas, etc. Last year, exactly the same time we had the flash crash. Fears of Greece, fears of Portugal, Spain, etc.
The American consumer has lived like a hermit crab for 3 yrs now. They are feed up and want to spend. And they are spending. My predication… SiriusXM will blow away “analyst” estimates. I’m basing my prediction on my own personal research, not Hail Marys.
Spencer,
Raising guidance is primarily a function of sub growth. I agree it is more likely than not that sirius will not raise guidance. However, the reason is not trivial like Barton is trying to demonstrate – Japan’s disruption due to earthquake. This is obvious to everybody who follows the stock. Still, we should not rule out much better subscription numbers than being projected now. We are observing not only a 20% increase in Q1, 2011 auto sales vs. Q1, 2010 but also the quality of this increase, namely a skew toward auto retail sales vs. fleet and higher proportion of sales in trendy cars like VW, Audi, BMW and others where folks are more likely to subscribe. All my friends who own these cars have sat radio. In addition, the economy in respective first quarters was much better. This is why it is not unreasonable to expect over 400K new subs or even more. The good news is that there are only a few days left to find out.
As to Barton’s downgrade, my opinion is that it was simply not smart. You do not do that because you are in trouble with your own analysis (Sirius hit his $2 target the day before) and you do not do that four days before the announcement. I call such moves very cheap. As simple as it is.
Osborne would agree (suck up) with this guy, or any analyst for that matter, if he said the sky was falling. Are you kidding and blow any chance of having this schmuck as a guest speaker on that flop of a round table discussion. “GAG”
ah sclem is trolling again. You simply can not resist this site can you. I see you are a listener to the round table as well….that’s great.
For the record, I have interviewed several analysts that I do not agree with. These guys are professionals and are not afraid of a differing opinion. You really need to grow up and stop falling into that “unsophisticated” category Mel has spoken of.
Unfortunately, Spencer, these professionals make very uprofesional moves that put in question their professionalism. Have you ever seen Tuna Amobi do that? This is the guy who falls in the category of true professionals without “doom/gloom” panic or euphoria.
VI….
Tuna is fine as an analyst, but has been well off the mark on Sirius/XM in the past. In particular before the merger.
I would not classify him as gutsy though.
In my opinion the best analysts that followed this company are no longer doing so.
Also,
As is obvious from my earlier piece, there was definitly the most reasonable third option that for some reason you failed to mention – to sit tight, do nothing and wait for the results. The guy does not deserve your defence. What kind of “analysts” are those who make moves on no news literally days before the announcement. He is covering blatantly his rear. banks did the same thing about a year ago. And what happened!!! Although he upset siri run to $1 afew days before they were to make it, siri still got there a few weeks later. As the result Basnks simply discredited himself. The same is going to happen to Crockett. They need to learn from history.
A downgrade isn’t negative?
I can’t believe you actually had the guts to post that stupid statement.
You ever work in a boiler room Spencer?
Clearly you did not comprehend the article…
If you follow the sector or follow the analysts you know how they react and when they move. Crockett’s move was one of reaching the target on his model. He will certainly digest what happens on the call and take it from there. He is neutral on the company, which is not negative. He simply sees that at the moment there is nothing compelling enough to up the price target. Perhaps that will change on Tuesday.
If he does no adjustment after Tuesday then you can fairly say that his sentiment is for limited upside.
a true profesional will wait to get the guts of the quarter. disect it and then make an educated valuation with factual info. i’m tired of these seat of the pants analyst who wing it….it’s always suspicious. PERIOD. Spencer writes with a negative bend/slight towards siri. PERIOD. jeez..that gets kinda immature(unsophisticated).
dj….
Crockett had a responsibility to act on his report when it approached his target. Whether earnings is around the corner or not, he did the responsible thing in making a call.
His call was to wait and see…He did not say sell….he said that he is neutral. In my opinion that is not being gutless. It is being prudent. He told his clients to buy well before $1.65 and then guided up to $2.00 as the $1.65 target was approached.
He will certainly disect the quarter. Then we will see where his model takes him. He now has room to upgrade to buy and raise his target if he sees fit.
I really think that it is prudent for a neutural call before earnings, having listened to earnings calls from SIRI for 5 plus years now, you must keep your eyes, ears and pencils ready, especially if your dealing with other peoples capital. Theres a lot of variables that can swing this stock from satrad 2.0 to liberty and dish and stern etc. all could be good all could be bad who knows? thats why neutural is a proper and prudent call IMHO