Many are expecting certain words or phrases to be uttered by Mel when his turn is up, from increasing subscriber guidance for 2012, to perhaps hinting at expectations for 2013. Given that Sirius XM has added over 1 million subscribers in the first half of the year, it should be clear that Sirius XM can easily beat its 1.6 million guidance before 2012 is up. It only makes sense, then, that investors are expecting Mel to raise guidance as high as 1.8 million or 2 million subs. Beyond this, some investors will be looking for hints towards 2013 guidance but I'd expect these numbers will be kept until Sirius XM's third quarter conference call due on October 30th.
Investors may also be looking for what Mel has to say on the issue of Liberty Media's pursuit of de jure control. Some may wish to hear more clarity on the situation, and some may wish to pick apart not only what is said but how things are said. How Mel sounds will be important to investor perception, and obviously a relaxed and upbeat Mel will come across in a more positive fashion than a defensive (or for that matter, offensive) or negative Mel.
In my opinion we'll hear increased guidance and quite possibly Q3's subscriber numbers when Mel speaks on Wednesday. The numbers are already known, Mel has shares being sold mid month as part of his adopted trading plan, and I'm fairly certain he'll want those numbers out as soon as possible and not save them for the Q3 conference call. If they're good, it could mean a little boost to the share price. I also think the street is expecting this, though, so any impact may be a bit muted. As far as what Mel may say about Liberty's pursuit of control, I feel he'll be direct and brief with any questions (if there are any) and thus my expectations are rather neutral here.
Buy or sell? That's the main question, and in my opinion a buy is warranted at Friday's closing levels of $2.69 or lower. I feel Sirius XM is currently trading at a reasonable price for current guidance, and with the possibility of that guidance being raised and a high probability that Q3's subscribers will come in higher than expected, that price should go up. While I am not personally buying any more shares, I will be holding my position at least until I hear Mel speak.
There is a small argument on the sell side. Sirius XM has, in the past, often run up a bit in price in anticipation of Mel speaking or heading into earnings calls. Many times the stock has sold off sharply when expectations are met or even beaten, and investors are left shaking their heads wondering what just happened. If you don't have the stomach for the possibility of this, then it is best to sell before Mel talks, and not hold until after. If your hands are weak, you could sell into a downturn or a bear trap and forfeit some of your profits. As I said, though, this is a small argument. Past performance does not indicate future results, and just because Sirius XM has sold off in the past does not mean it will do so in the future. The last few calls have actually bucked this trend, which should be proof enough.
Plain and simple, though, I continue to be bullish long term on Sirius XM's future. Sirius XM has proven the bears and detractors wrong time and time again over the years and on the back of strengthening auto sales should continue to outperform in the years to come. If you can "ride the waves" then Sirius XM should do you very well in the long run, and even if today's pricing doesn't look so good tomorrow, in a year today's pricing will likely look like a steal.
Disclosure: I am long SIRI.