Liberty Has Been On A 3-Day Buying Spree... Again

Aug.29.12 | About: Sirius XM (SIRI)

The last few days have seemed relatively uneventful for Sirius XM Radio (NASDAQ:SIRI) stock. Almost an eerie calm, where the price just sat at the same place all day long since last Friday. Well now it turns out that Liberty Media (NASDAQ:LMCA) has been secretly shopping for the last three days. And the company has added another 40.4 million shares of Sirius to its shopping cart. Liberty bought shares on the open market on the 24th, 27th, and 28th.

Prices from Yahoo Finance:

Date Open High Low Close Volume Adj Close*
Aug 28 2.55 2.55 2.52 2.53 35,708,800 2.53
Aug 27 2.55 2.56 2.50 2.54 98,632,300 2.54
Aug 24 2.48 2.55 2.47 2.54 47,136,700 2.54
Aug 23 2.54 2.54 2.48 2.50 46,517,400 2.50
Aug 22 2.56 2.58 2.55 2.56 22,901,700 2.56
Aug 21 2.60 2.62 2.56 2.57 36,447,100 2.57
Aug 20 2.60 2.64 2.56 2.56 68,008,600 2.56
Click to enlarge

After the company filed its intentions to petition the FCC for De Jure control of Sirius ten days ago, the stock jumped to $2.64, a new 52 week high. There has been total silence about the filing from both companies ever since. And there has not been a statement from Sirius regarding management's approval or disapproval of Liberty's intent to buy over 50% of the company. As a result the stock has been in a slump. On Friday it fell to $2.47, which must have gotten Liberty's attention, because that was the day the company began buying again. That explains why the stock popped right back up to $2.54 for the next three days. According to the filing Liberty paid roughly $2.52 per share over the last several days. Looking at the average volume over the last few days, there was not a clue that Liberty was buying.

Chart forSIRIUS XM Radio Inc.

Sirius has a lot of things going for it. The stock has been performing so well that in the latest available short interest report, Sirius short shares dropped by 70 million in just two weeks. And several analysts are predicting the EPS for Q3 will jump 50% to three cents. Revenue continues to grow and the new guidance predicts that it will be $1.76 Billion for the next two quarters. Due to the company's recognition of NOLS, the P/E ratio is down to 4.68. And the average price target is $2.80 which is a ten percent jump from the current price of $2.53.

Price Target Summary

Mean Target: 2.80
Median Target: 2.80
High Target: 3.35
Low Target: 2.25
No. of Brokers: 13
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Considering that Liberty plans to do a Sirius share buyback upon taking hard control of the company, the share price should really take off. Now we will have to wait for news regarding whether Sirius is on board with this latest FCC filing. As I have mentioned before, no news is good news. I would think that Sirius would have filed an objection by now, if they did indeed object. But if you are thinking of adding to your position in the company, or taking a new position, I would do that before the buyback starts. The stock doesn't seem to be getting any cheaper.

Disclosure: I am long SIRI. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.