Seeking Alpha
Long only, research analyst, portfolio strategy, media
Profile| Send Message|
( followers)  

Yes, you're reading this correctly. I want you to sell every single last one of your Sirius XM (NASDAQ:SIRI) shares.

You might be asking yourself why in the world someone who is long shares of Sirius XM, and holds a long position in call options, would ever want others to sell. The point is to make money, right? Wouldn't a long want buying pressure, and not selling pressure?

Not always.

My position in Sirius XM has a longer term horizon than tomorrow. I expect significant appreciation in the range of 30% to 40% per year for 2013 and 2014. Part of that has to do with Sirius XM's fundamental story that investors have heard time and time again - increasing subscribers, better ARPU, stable churn, and inroads into used autos, all while auto sales are increasing year over year.

Because I have a long term horizon I am not looking for that next pop so that I can flip my shares. I'm not a day trader. I'm not looking to make a quick buck on a few pennies worth of movement.

Consider a portion of fellow author Tim Heitman's comment on my most recent article:

If you think the media and short sellers are keeping the stock price down, you should be happy about that. Read Warren Buffett's comments on how an investor should welcome a lower stock price if you are buying stock or the company is.

Remember, there are lots of studies that show that stock prices are up to 16X more volatile than the underlying fundamentals of a company. And smart investors take advantage of that fact.

I rarely use the Author's Pick feature here at Seeking Alpha but Tim's comment was so on point that I couldn't resist.

So what am I looking for "right now?" I'm looking for Sirius XM to purchase shares under its $2 billion stock repurchase program at the lowest point possible. So long as the company continues its performance, that is all that matters to me today. It's MY elephant in the room, and in my opinion should be the elephant in the room of other long term investors such as myself.

Consider this. The cheaper the price Sirius XM pays for its own shares, the more it can buy back. If Sirius XM can get 100, 200, 300 million shares in the low $3 range, that's preferable to it buying those shares at a higher price. Longs should not want the stock to appreciate significantly during the buyback period.

And that's why I want you to sell. Give your shares to Sirius XM, as cheaply as possible. My investment in Sirius XM is investing in itself through the buyback, and I want the most bang for my buck.

That being said, please short into the buyback as well. Even better if you do. Let Sirius XM pick up those shares on the cheap, and then you can buy them back later at a higher price.

And third? Pump up the volume! Get that money flowing! Trade those shares as much as possible so that Sirius XM may buy back more under its 25% per day restriction on buyback plans.

Obviously, I don't want anyone to lose money. But that's how it goes in the market, for every winner there is a loser.

I want to win.

Source: Sirius XM: Why I Want You To Sell Your Shares

Additional disclosure: I am long SIRI $2 January 2014 calls.