What is considered a good return on your investment? 10% per year? 20%? Most would say between those two values will set you up for early retirement and perhaps even place you among the top 1% of wealthy people in the United States.
As investors we are always looking for ideas which will help us meet our goals. The following three picks are my personal picks for between 10% and 20% gains in the next 6 months (and even more year over year).
Sirius XM (SIRI)
Sirius XM is the only provider of subscription based Satellite Radio service in the United States. With over 20 million subscribers, a profitable balance sheet, and exceptional prospects for the full year 2012, Sirius XM is poised to appreciate well beyond its current share price of $2.26.
A large driver of subscribers is auto sales, and they are shaping up for an exceptional year. SAAR was approaching 15.1 million for February, and March looks "awesome" as Spencer Osborne puts it. With inroads into used automobiles as well, along with additional retail exposure with the Lynx and Edge radios, Sirius XM can be expected to add considerable numbers to their subscriber base. This should increase other numbers in a positive direction across the board, compounded with the modest and so far well received price increase this year.
Sirius XM has flirted with resistance at $2.35 recently, and appears due to break through very soon. Make your trades now for gains to come soon.
Liberty Media (LMCA)
Any mention of Sirius XM in the bullish sense should be paired with Liberty. Liberty owns a 40% stake in Sirius XM and can at any time increase their position up to 100% ownership. Since Sirius XM makes up over 50% of Liberty's market cap, what is good for Sirius XM is good for Liberty.
Liberty also owns interests in a host of other companies including Barnes and Noble (BKS) and Live Nation (LYV). Liberty offers a perfect play for anyone seeking exposure to Sirius XM indirectly, and gives the added benefit of hedging with interest in the other companies in their portfolio.
I have recently hypothesized that buying Liberty is, in essence, buying into a Sirius XM burger. You get the meat in Sirius XM, and a bunch of other ingredients in the other companies which make it ever so much more tasty.
With auto sales shaping up to be outstanding this year, who better to benefit than the auto makers themselves? With 14% increases in sales from February 2011 to February 2012, and March projections looking stellar, the future looks very bright for Ford. Arguably you could choose almost any auto maker for gains, but I've chosen Ford here simply based upon my personal experiences with Ford vehicles (one of my vehicles is currently a Ford), and my opinion of their quality product.
Keep an eye on auto sales rates throughout the year on a month to month basis, and purchase Ford sooner rather than later in order to maximize gains. If I may again suggest, readers should follow Spencer Osborne for auto number predictions. He typically will release them several times a month in relation to Sirius XM above. As the year unfolds, and higher numbers are reported, I expect Ford to increase in value along with these reports.
Keep in mind that Ford has also declared a $.05 dividend. Although small, every penny counts, and the dividend makes Ford more attractive.
By making the right decisions for your investments and by adjusting your portfolio from time to time, you can significantly outperform the indexes. Be sure to do your due diligence, research your companies, and always invest with conviction. This list of three quality companies should give you a great starting point for at least a 10% to 20% gain over the next several months.
Additional disclosure: I am long SIRI April and June $2 calls.