Add Sirius Satellite Radio Inc. (NASDAQ: SIRI) to the list of stocks Wall Street thinks are undervalued. You heard that right.If anyone wants to take the advice of these analysts, I have a bridge in Brooklyn I would like to sell you. Sirius, which reports earnings next week, is expected to lose 7 cents per share, down from 11 cents a year earlier, according to Thomson Financial. Revenue is due to rise more than 33% to $272.3 million. Their average price target is $3.86, higher than the $2.80 where the stock currently trades. The high target is a whopping $8.
I am still not convinced this is a good stock. Even if the XM Satellite Radio Inc. (NASDAQ: XMSR) merger happens, I don't see the company's prospects improving.
First of all, people aren't buying cars of any sort including those that come with satellite radio pre-installed. Moreover, Apple Inc. (NASDAQ: AAPL) has a device called the iPod. Perhaps you have heard of it.
"Now that many new cars offer input jacks to broadcast media player content through car stereo systems, won't that compete with the commercial-free digital music that makes satellite radio so appealing?" asks Rick Aristotle Munarriz of the Motley Fool.
Good point. Keep in mind that I am a satellite radio subscriber. In fact, I am listening to Howard 100 over the Internet right now. I also like my iPod. I find Howard Stern as amusing as most people and enjoy the commercial-free music such as the Grateful Dead Channel. But I am not sure whether I am going to need both devices in the future.
Until its future is cleared up, investors should avoid satellite radio even if they are fans of Howard.











Reader Comments (Page 1 of 1)
5-07-2008 @ 6:39PM
Scott said...
Some people aren't content listening to music from the 60's all the time. Some people like to hear music they've never heard before, and they also like to have it commercial free. I guess people who want to hear the same songs over and over again will be content with an iPod, but a lot of folks aren't like that.
5-07-2008 @ 8:15PM
Jamm said...
Jon Boy, You hit the nail right on the head!
I simply have niether the time nor the desire to listen to clips, download, listen to more clips, download some more, and listen to more clips, and then download just to listen to music -- talk about your proverbial rat on a treadmill.
so I gave that damned Nano to my daughter.
SIRIUS is a much better fit for people who know what they like and want more of it with a variety of artists at a more than reasonable price.
For people on the go, SIRIUS is the way to go and you need not be tethered to your car to receive all this value.
But, Jon boy, lets switch from consumer to capitalist and I do this only because your blog reveals you as a opinion monger as opposed to trader / investor.
Forget about radios, music, and the FCC for a second because here's what's going to bring in the SIRIUS bucks in a future that is already here and now.
Although I haven't got SIRIUS Backseat TV(TM), I believe it will rapidly become one of the top selling products on the market.
First of all, by targeting 'on the go' parents with children in tow, SIRIUS stands first in line to capture its share of an unextinguishable supply of loyal retail customers and an aftermarket revenue stream totally independant of new car sales.
We will never have a shortage of any of the above.
Mark my words.
Before the year ends "Pimp my Ride" will, no doubt, feature exactly what I describe to you now on a 21 inch diag, custom mounted in a 1969 Chevy Impala proudly wned by a mother of four on welfare.
And Jon, you won't break the bank. Anyone and everyone can afford it.
Three premium kid vids for less than 7 bucks -- you can't beat that with ky and rubber gloves.
With the proper gear, you can uplink these vids to any TV set so AGAIN, it doesn't require being in your auto.
OK Jon Boy. Since SIRI is already streaming video, all that's left is simply a matter of natural evolution. Plain and simple.
And who knows?
Once Sirius gets Serious and starts streaming nonstop adult smut 24 hours a day, 7 days a week for $39.99 monthly -- which is right in line with the I-net spooff peddlers and less than 4 PPV movies from Cox CAble, -- I'll probably don the latex mittens and be the first of 10 - 20 million subscribers to sign up in year one.
And doing thus does not come with a Howard Stern Price tag attached to it.
Comcast, Charter, Cox, and Dish report anywhere from 80 - 95% pure profitfrom their orificial fulfillment offerings so, Jon, my boy, you must remove that dung dipped clothespin from your nose and smell the roses my friend
Merger or no merger, SIRI is redefining itself and could easily post a BV of $8 / share within the next four quarters.
What do you feel it will trade for....then?
5-07-2008 @ 8:15PM
bill said...
yes ipods are a factor however they need to be programed.even if your pod holds 250 song you get tired of them.when i stop in my truck i hide my ipod and cord due to theft.sirius is convenient.
5-07-2008 @ 9:39PM
Plowboy said...
Unless you're under 30 and under-employed, you probably don't have time to play and load an Ipod. Even if you did, Ipods offer music, not the format of listening/learning available via satrad.
As for auto sales, they are down from 16.5 million to 15.2 million.... hardly abysmal.
I'd guess the Author of this piece is 27 years old, and doesn't do his/her research.
5-10-2008 @ 12:56PM
George H. said...
The writer of this article makes a good case and I would recommend that he email a copy of the article to the FCC who apparently does not agree that the iPod is a substitute media device and perceived as competition to sat. radio.
One other point, maybe theren't that many cars being sold as expected, but do you know how many cars are still out there without a sat. radio? Think about it. XM/Sirius off the shelf device subs will be outselling new car subs soon if not already.
5-15-2008 @ 4:17PM
John said...
Are Car sales down? Lots of people are going to buy smaller Cars because of the Gas price.