Sirius XM Radio (SIRI) Receives Upgrade
Q: What animal can jump higher than a house?
A: They all can. A house can't jump.
This children's riddle really isn't much of a riddle, is it? It's a bit like the recent upgrade of Sirius XM from hold to buy by David Joyce of Miller Tabak -- it wasn't much of an upgrade.
As a long-term investor in Sirius, it's always nice to see analysts issue upgrades for the company's stock. Usually an upgrade will provide a short-term jump in the price of the shares, and Friday's gain of just over 3% may have been the result of the Miller Tabak upgrade.
Joyce, who had downgraded the stock from buy to hold early last month, maintained his price target of $2.55. However, because the price of Sirius had dropped approximately 20% since the downgrade, it became a buy. If the stock goes back to $2.40 next month, we should probably expect another downgrade. There isn't anything wrong with Joyce changing ratings based merely on price. It's just that it would have been much better for investors if the upgrade came as a result of Joyce seeing improvements based on the Q1 earnings report and if it had been accompanied by an increase in his target price.
Shareholder Meeting Tomorrow
Q: What time is it when an elephant sits on a fence?
A: Time to get a new fence.
Some investors are looking for a major announcement at tomorrow's shareholder meeting where the unavoidable topic will be the elephant in the room -- Liberty Media (LMCA). Now that Liberty Media has come down off the fence and begun purchasing shares, it will be impossible to say that the board has not had discussions on the topic without looking totally inept. Will we hear Sirius CEO Mel Karmazin say, "Well, 46.2% is not the new 50%"? Will we find out that Liberty is playing hardball and is refusing to discuss its plans at this juncture?
It's possible that there will be some new information, but any major announcement will depend on Liberty.
Q: Why did the moron throw the clock out the window?
A: He wanted to see time fly.
Time will fly for Sirius investors. The shareholder meeting will be here in less than 24 hours, beginning shortly before the markets open. Much like my expectations for the first-quarter earnings report and conference call, I am not expecting some startling revelation at the shareholder meeting. I expect many questions from shareholders, but little in the way of answers.
I will be paying much more attention to Liberty's CEO Greg Maffei when he speaks at the Barclays Global Technology, Media and Telecommunications Conference on May 23 at 2:45 p.m. ET. I'm also not expecting a great deal of insight there either.
And I would really like to be surprised at both events.
Disclosure: I am long SIRI. I have $3 January 2013 covered calls against most of my Sirius position, as well as some $2 and $2.50 January 2013 covered calls. I may initiate (or close) a buy stock/sell option position in Sirius, discussed in another article, at any time. I have no positions, or any plans to open positions in the next 72 hours, in Liberty Media.