Normalized Auto Production on the Horizon – SiriusXM Should Benefit
Since the March 11, 2011 earthquake and tsunami in Japan, investors in several sectors have been monitoring the aftermath closely as it relates to specific industries. Investors in SiriusXM Radio (NASDAQ:SIRI) have been no different. The auto channel delivers the majority of satellite radio’s new customers and is a key component to the company’s continued growth.
We are seeing many auto makers reporting that the stoppages in production are easing and while production levels are not at full capacity, they are gaining consistency, which is good news for the industry. Mitsubishi announced that as of April 18th, their plants are running at “continuous operations” for the first time. Production will not be at 100%, but keeping plants open and staffed is the best way a company can begin to return to a normalized situation.
While Mitsubishi is a smaller manufacturer in the OEM arena, their public statements at a major auto show indicate that parts supplies, which has been the biggest obstacle in returning to normal production, is getting to a point where manufacturers of cars can predict the supply chain much better. Certainly there will still be issues surrounding parts and production, but for the most part, things seem well under control.
For satellite radio investors this news is quite positive. Consistent production combined with strong April auto sales should be enough to keep SIRI shares trading at decent levels.
It appears the non-U.S. companies have been hit harder and GM, FORD and Chysler will likely be the beneficiaries of this and I belive this will mean more subs for Sirius overall since Toyota for example was not their best partner yet as far as pre-installed.
At the NY Auto show Ford appeared to be Siri’s best partner by the display of Sirius Sat. radio stickers and program lineup hanging from the rear view mirrors.
Watch out for talks in next 30 days with Mel and liberty’s John Malone
I smell buyout on the posative side for siri common stockholders. Or else they are slowly raising rates to make them more marginable or a shot at
at a better position on the sandp or NASDAQ during rebalancing.
Lawsuit? Let liberty take over Sirius
with Mel working for liberty and watch how
fast the suit,if any, settles. Eric A