October Auto Sales Look Positive for Sirius XM

By Brandon Matthews

In an exclusive Satwaves Radio interview last week with Senior Analyst Jessica Caldwell of Edmunds.com, Miss Caldwell predicted October auto sales of just over 800,000 units. The results are in, and the the total number of new cars and light trucks sold for the month of October is 804,748. Congratulations Jessica on making that call.

Positive Satellite Radio subscriber growth occurs when the SAAR rate (Seasonally Adjusted Annual Rate) is over 10 million units. The SAAR rate currently stands at 10.3-10.5M for 2009, and early estimates call for 11.5M in 2010, which is still a far cry from past years when the SAAR rate was 16 million. Although the auto industry focuses on year-over-year sales, I am just as concerned with monthly and quarterly data as well as future SAAR projections.

October sales of 804,748 again put Sirius XM Radio’s (SIRI) subscriber growth on the cusp of OEM growth, as the first third of Q4 2009 is completed. Looking at that number alone, one might be tempted to extrapolate that 804k throughout the quarter and come to a conclusion that 2.4 million vehicles will be sold, which would seemingly fall slightly short of the quarterly mark of 2.5 million. The number is a bit misleading. September 2009 sales came in at 748,434 which means that on a month to month basis, an uptick in new car sales has occurred, giving merit to forecasts of higher sales going forward.

As a new model year takes hold, penetration rates are likely to have increased across all manufacturers. As history has demonstrated, higher penetration rates offset lower OEM sales. Of increasing importance, is not so much how many cars were sold but which models made up the bulk of those sales. For example, Hyundai (HYMLF.PK) and Kia which boast 100% Satellite Radio penetration rates have seen sales rise significantly throughout the year. Toyota (TM) has not seen historic overall sales, yet sales of the Satellite Radio equipped 2010 Toyota Camry continue to excel with 30,136 Camrys being sold in October. Other manufacturer data can be found in the chart below. [click to enlarge]

Position: Long SIRI

Comments

[Pell:]

Since the merger was announced.

And the SkyDock is an accessory to a hot product that also offers other options and applications beside SiriusXM. An accessory isn't a real break through, but a unique product offered by Sirius to carry their own product around would be earth shattering.


On Nov 04 04:03 PM connorport wrote:

> The money is already being spent. The IPOD and ITOUCH apps came were
> delivered from an outside company. If anything this saved SIRI money
> in the long run on that development. How long have you been following
> this stock?

Nov 04 04:08 PM

[between the...:]

AIG going up since reverse has nothing to do with it not being day traded or naked shorted or its volatility or even the reverse split. It has gone up since former CEO Greenberg made some bullish comments on it. Even after the bullish comments, it goes up and down daily. You are a moron if you are long AIG. You watch however when the next round of rate resets hit the ARMs (if you know what that means - being right out of college, I doubt it) AIG will shoot right back down. They hold the ultimate risk on mortgage failure including commercial loans. They are a bankrupt entity to the tune of 85 billion and minus the bail out would not be in existence.

Nov 04 04:11 PM

[between the...:]

AIG went down 8% today when the fed stated that they will hold rates steady for a long time today. You think that a r/s stopped daytrading, naked shorting, and flashtrading of AIG when it is not trading with the fundies? You aren't going to sell us on this board on a r/s unless absolutely needed to prevent de listing.

Nov 04 04:15 PM

[connorport:]

Tomorrow is a new day. Since i don't believe in conspiracy to the level some here do i will hold my stake and wait. If Q3 doesn't bring it then i guess we will have to wait until Q4. I'm Good!

Nov 04 04:43 PM

[R A F:]

Just heard a promo on CNBC featuring Mel Karmazin tomorrow morning topic: Riding the Airwaves to Recovery

Should be an interesting presentation!

Nov 04 04:55 PM

[between the...:]

Love the promo. Love it. Shorts have to be absolutely petrified.

Nov 04 04:59 PM

[between the...:]

I have a feeling that I'll be moonwalking and caterpillaring in my office as this stock begins take off tommorrow.

Nov 04 05:07 PM

[dayworker:]

Wow. Nothing has happened except a few up ticks in car sales and the caffeine crowd is hitting the ceiling.
It's along way to start counting the sales of your stock at higher price share when the budget is running on empty.
What's the incentive for the investor. The same old tired programming that Mel and Co have created for the elder set. Anything new for the younger crowd who are buying cars. Oh maybe they are just tuned into their ipods and iphones for some more independent and original programs.
Watch out the apps are coming to get you.

Nov 04 05:25 PM

[between the...:]

Dayworker: Get used to your 8-5 job.

Nov 04 05:31 PM

[between the...:]

See you dudes in the morning. Should be a nice day for the 401k and the overall market after the CSCO report. Hopefully, we'll get more good news from the SIRI report.

Nov 04 05:43 PM

[R A F:]

I think I detect a whiff of smoked bear in the air!

Nov 04 06:19 PM

[Jerrold Wil...:]

Dayworker, are you on prescription drugs? Ok, name one of the independent and original programs that you get with one of these apps, that has any significan audience. I'm not talking Pandora or some other computer generated playlist, I mean a personality. If the audience is large enough, I bet Mel K will make them an offer for a channel. Or are you just talking trash, because you have nothing better to do? Honestly, have you ever tried SIRIUS XM to have an idea of what's on it? I bet you if you describe a person to me, I could find a channel they would love. Go ahead...try me..
s

Nov 04 06:30 PM

[dayworker:]

Jerrold read my comment on the last thread. SIRI can only survive with the iphone app. Younger people are not tuned into the old fart programming. They use their ipods and iphones to find their entertainment. If they want SIRI out of the auto they most likely have to use an iphone. What makes you guys think the old fogey programs on SIRI are going to appeal to young people who spend more on entertaiment and buy more cars. How many of you old fart
republicans are buying cars and music and dvd's. I know you sit there and watch baseball and bake cupcakes with
Martha, and get your thrills with Stern having girls show some tit. Wow, that's entertaiment that will save the day.
SIRI is now dependent on the iphone app. Except that the apps will out pace any programming SIRI will come up with.
The list of entertaining apps is too long to run by you Jerrold. If you weren't so long in the tooth you would see them but you have to be a lot younger. Sure when I see
the program choices on SIRI, I just about puke now. A good thing once but now a sludge thru crap. Oh by the way
I suppose the Christian channel is now the hot item. Right.
Barf, Barf, Barf. SIRI better pray another multi programmer doesn't come up with a new an app for new generation that wants ENTERTAINMENT.

Nov 04 08:16 PM

[dayworker:]

In fact if Liberty/Malone were on the ball they could do their own app with their programs. They wouldn't need SIRI to run a program schedule they could do it on their own. But first they have to get their money back. In fact they could go audio with everything they have on the satelite network. The tv shows, news, sports, any channel they have a contract to put on cable they could put thru an audio app. The whole line up on Liberty audio app. They could create a full additional revenue stream with the cable program schedule they have now only with an audio app link. They could completely by pass SIRI and blow them out of the water. Imagine that all Liberty on audio app on the iphone. In fact Comcast cable could do it, Time Warner, or even record companies could do full
schedule of their recording artist, for free to sell cd's. Boy the times they are a changn.

Nov 04 08:51 PM

[dayworker:]

Sleep tight tonite boys, there is an earthquake a commin'.

Nov 04 08:55 PM

[R A F:]

dayworker/pell/SIRI-Doom - All lookalikes. Probably one person masquerading under several ID's.

Nov 04 09:08 PM

[Jerrold Wil...:]

Dayworker I now realize how young you are now. I understand you a lot better. How old are you....22? You are just young and don't have a lot of understanding of the world around you. For you to make fun of the Christian channel just shows your immaturity at it's best. Don't get me wrong, I am not Christian, so I am not offended by your mockery of the channel However, I am smart enough to know that there are millions of people who are Christians and will pay for that content that is exclusive to SIRIUS XM. In fact, I have a relative that got XM on my account just for that channel. I guess your mom or grandma would just get the Jesus app...but most don't want to go through that trouble. lol...When I was young (12 years old), I was just like you, you will outgrow it, i hope.. I hesitate to even comment about "old" people don't buy cars...young people are the one buying more cars...That is not worth responding to....yeah..I guess i am long in the tooth...whatever that means....I just would like you to name 1 of these personalities on an "app" that can match Oprah, or Howard Stern, Martha Stewart, Bruce Springstein, Eminem, G-unit, Opie and Anthony, Jamie Fox, Deepok Chopra, ,,,,,i could go on....Please just name one...not a list that is too long...just one that is bigger than any I just listed.....Let me give you a quick economics lesson in a couple of sentences. Older people have more years experience in the work force, more education etc...thus they usually have more money and better credit, thus they are more likely to buy a new car than younger people in their early 20's and are morelikely to be need quality talk, news like CNN, MSNBC, etc. Especially in this economy. Therefore your belief that "old" people are irrelevant in the auto market is absurd. I assume you mean people in the age 35-55 as "old fogies". When I was 12, i thought anybody over 18 was old....grow up dude...Mature people with responsibilties and valuable time won't have time to get all these dumb apps you keep talking about! They dont even exist yet for anyone other than some college dorm kid for a reason!!!There is not a market for it!! so save it for 2020 when it may actually be relevant. Get off the drugs!!! Just say No...That was a saying before you were born from Nancy Reagan...Congratulations on being the voice of the new generation! lol....you seem to know what they all want...I said before...young people (18-25) has never been the prime market for satelite radio....you may not be smart enough to understand this...but concentrate....there are more than enough "old fogey" as you call us, people that can support this technology. 35+ is a great market...there are a few of us still living, despite what you think...get your milk and cookies and have a good night kid....go to bed with your iphone and go download some songs all night. Trust me, Most people eventually mature and enjoy channels like Howard Stern, martha Stewart Oprah, Sports, Religion channels......trust me on that...it's called maturity....BTW....When I was young, I would be doing more fun things than blogging about a company that I don't like. What's wrong? no girlfriend? lol..you spend too much time on your iphone apps to get a girl, sad little boy......get SIRIUS XM, put down your 100 apps and you will have time to get a life!

Nov 04 09:40 PM

[dbrown:]

The aig reverse split hasn't really helped the stock price. A few weeks prior to the R/S the stock hit a high of nearly 2.50, which with the 20/1 would be a $50 stock. It did go above that for awhile but since has traded below, so it had higher value prior to the split ( I traded AIG quite often prior to the split from the 1.40- 2.00 range)

At any rate, i'm excited to see what will come of 3q.

Long siri

Nov 04 10:07 PM

[cos1000:]

pell.... how many times your ignorance.... wow..


On Nov 04 04:04 PM Pell wrote:

> Last time I comment on between the hedges to show his (And I have
> to say the word) Stupidity!
>
> AIG R/S changed the price to about $17 to $20 I can't quite remember
> exactly it could have been $13.
>
> BUT IT IS TRADING TODAY AT $36.
>
> THATS IT FOR YOU YOUR ARE DONE I WILL NO LONGER COMMENT ON ANYMORE
> OF YOUR POSTS.

Nov 04 11:57 PM

[David Cay J...:]

How many new cars come with satellite radio would seem less significant than how many car buyers maintain subscriptions. Lots of cars have the capability to get SiriusXM, but do not pay to connect.

A flint eyed analysis would examine subscription data.

Nov 05 09:05 AM