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Stephen Faulkner  

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  • Is Sirius XM Setting Up For A Significant Move? [View article]
    Out of the money calls are for short term trades or selling against a long position. They are very rarely profitable over time and if they are you could often have made more with a different play such as a call spread or going short puts.

    From a trading perspective long $4 calls affords a hedge to short $4 resistance over the last several months (there is someone who has done this with approx 80,000 $4 calls repeatedly, 8 million shares worth). The calls acts as insurance.

    Always stick with calls which are in the money and cost little or no time premium for leverage purposes. Anything else is a short term gamble. They shouldn't be "held" very long unless they are being used as that hedge.
    Jul 15, 2015. 04:49 PM | Likes Like |Link to Comment
  • Is Sirius XM Setting Up For A Significant Move? [View article]
    Then you should cancel your subscription. You have mentioned this in several comments. Have you cancelled yet or will this go on for months and months like complaining about the share price and saying you'll sell the next pop?

    There may be others who cancel as well. Not a big deal. I think the cancellation rate will be less than 1 in 5 or 6 due to the increase and thus the increase will add income rather than lose it.
    Jul 15, 2015. 04:45 PM | 3 Likes Like |Link to Comment
  • Is Sirius XM Setting Up For A Significant Move? [View article]
    No Whistling Straits this year. Shame too I wanted to go shooting (not a golfer) or at least take advantage of the spa there with the shiny new GF (yes she will read this and I'll probably get in trouble for referring to her as 'shiny')
    Jul 15, 2015. 04:42 PM | 3 Likes Like |Link to Comment
  • Is Sirius XM Setting Up For A Significant Move? [View article]
    I think you're just fine with the thought that top line will not accelerate. SIRI is a turtle just plodding along. Probably won't be exciting... and it will probably bore most out of the stock over the next few years.

    Let's face it, even if it moved to above $5 a share for some reason many will look and say "but it was $4.18 in 2013 and so it took 2 years to gain 20%... forget it".

    One of the reasons I have suggested longer term buy / hold / add investors simply buy below the 50 day moving average (or the 100 or 200 if that is found to be more suitable). Keep it simple, and this ensures one doesn't buy a "Rip" and chase sudden moves. Thus nobody would have bought $4.18 in 2013 and instead all purchase prices would be below $3.85 and averaged well below the current share price. A move to $5 may be more appealing to them. A move to $5 may be absolutely wonderful for anyone who got in around $3 per share last year, giving a return of 66%.

    It's all about perspectives, I guess.

    I can understand concern from current valuations and honestly I don't see more than 20% growth per year at the boundaries, top and bottom, of where I would expect SIRI to trade without some sort of shift... perhaps due to Agero, SXM17, etc... or surprise in the form of consistent reduced churn.

    I do feel SIRI is near the bottom end, though. Obviously stocks can exceed expectations either direction, but I think from here there is good opportunity from appreciation.

    From $5? Not so much. Not right now. And that may be enough for many to sell on the way up.


    No idea on the next one... Watch the head mounted virtual reality space. It will be huge. Unfortunately I am not confident in any of the players at the moment. Oculus Rift, mainly geared towards gaming, and the new Microsoft HMD do recommend NVDA graphics. With AMD taking a beating, and with AMD as the primary competition to NVDA on the mid to high end (there really is no other player) this may work very well in NVDA's favor.

    Likewise Windows 10 and the new DirectX is weeks away. That often pushes a graphics card upgrade towards "yes" for people who were on the fence.

    I have not looked at NVDA closely, though. This is just a bunch of observations as I have an interest in gaming.
    Jul 15, 2015. 04:39 PM | 2 Likes Like |Link to Comment
  • Is Sirius XM Setting Up For A Significant Move? [View article]
    Would probably show EPS of 0 if the full charge was taken.
    Jul 15, 2015. 01:02 PM | 1 Like Like |Link to Comment
  • Is Sirius XM Setting Up For A Significant Move? [View article]
    And we have one vote for lower! Are you positioned short to take advantage?
    Jul 15, 2015. 12:06 PM | 2 Likes Like |Link to Comment
  • Sirius XM Needs Strong Subscriber Growth And Margin Expansion To Justify Its Current Price [View article]
    Will take time to get to that point. I wouldn't be concerned about it. Game won't change overnight and I am sure LMCA is paying attention to the possibility of change and could maneuver around it.

    Regardless that doesn't affect the SIRI end unless one is invested there waiting for a spin.
    Jul 14, 2015. 01:06 AM | Likes Like |Link to Comment
  • Sirius XM Needs Strong Subscriber Growth And Margin Expansion To Justify Its Current Price [View article]
    I haven't invested in SIRI looking for a spin off.

    Over the years I have heard so many people talk about some form of RMT like it was set in stone. Using terms like they "will" or "when" they do instead of might or maybe or possibly. To date they have been 100% wrong.

    They don't need to spin out SIRI to make use of it. I wrote an article about this some time ago :

    http://seekingalpha.co...

    I'd probably write that a bit differently today but the idea is the same (as I said since I started writing I'm sorta learning as I go here... I don't claim to have a history or education in investing or trading... just a guy with an opinion and hopefully half a brain ;) ).

    Why would LMCA spin out SIRI and reduce margin collateral capacity? Doesn't make sense.

    SIRI affords LMCA a massive amount of stable flexibility. I guess one could argue they break it apart and retain controlling stake but then... why? What's the purpose? Sell it? Just keep it under LMCA.
    Jul 14, 2015. 12:56 AM | Likes Like |Link to Comment
  • Sirius XM Needs Strong Subscriber Growth And Margin Expansion To Justify Its Current Price [View article]
    It's unlikely there will be any equity specific news for $38. Doesn't need it. Proper good news should cause a breach of $40 on volume.

    Just looking at it through short term eyes. Can be valuable if trying to time an exit. Quite a few bailed at recent lows just days ago and I'm sure they're regretting it at the moment.
    Jul 14, 2015. 12:24 AM | Likes Like |Link to Comment
  • Sirius XM Needs Strong Subscriber Growth And Margin Expansion To Justify Its Current Price [View article]
    Famous last words ! ;)

    So you have a limit sell at $38?

    LMCA / K appears more attractive short term anyways. Suffered more than SIRI this pullback. You could get that $38 this week pretty easily if the market holds here.

    So you should be able to smile and get out very soon!
    Jul 13, 2015. 11:50 PM | 1 Like Like |Link to Comment
  • Sirius XM Needs Strong Subscriber Growth And Margin Expansion To Justify Its Current Price [View article]
    I'm sure you will get your chance near $4 again soon enough.
    Jul 13, 2015. 01:28 AM | Likes Like |Link to Comment
  • Sirius XM Needs Strong Subscriber Growth And Margin Expansion To Justify Its Current Price [View article]
    So if they hold the cash, do not buy back any shares at all, and continue along as is then the future cap would be ~$27 billion?

    Don't think so. You'd end up with less interest expense, or none. You'd end up with a pile of cash. You'd end up with zero debt.

    It'd change things, considerably.

    I have a cat riding a unicorn shooting laser eyes holding a golden gun rampaging through a happy field with rainbows as my profile picture. I'm not in corporate finance, but I've done well with my investment in SIRI.

    I think you will struggle to see your valuations outside of a large market correction.
    Jul 13, 2015. 01:05 AM | Likes Like |Link to Comment
  • Sirius XM Needs Strong Subscriber Growth And Margin Expansion To Justify Its Current Price [View article]
    You are modeling that SIRI will go from a current market cap near $21 billion to around $13 billion in this new spread sheet over 8 years.
    Jul 12, 2015. 11:06 PM | Likes Like |Link to Comment
  • Sirius XM Needs Strong Subscriber Growth And Margin Expansion To Justify Its Current Price [View article]
    Your model assumes share repurchases will be done at a share price which is nearly 400% above current share price in 8 years (2023).

    Wouldn't that assumption, then, mean that you assume someone purchasing SIRI at $3.70 today and holding would see nearly 400% appreciation in 8 years? Roughly 18.X% compounding per year?

    There are a massive number of moving parts here. But if you model that the share price will be nearly 400% higher from present levels in 8 years it sounds like an excellent investment to me.
    Jul 12, 2015. 01:10 PM | 1 Like Like |Link to Comment
  • Sirius XM Needs Strong Subscriber Growth And Margin Expansion To Justify Its Current Price [View article]
    Are you assuming the special dividends will be reinvested and held by all current owners through the entirety of the model?

    Does the special dividend reduce the share price by the amount of the dividend each time, or does the share price recover the loss? For instance if the SP is $3.70 and a 20 cent special div goes out does the SP go to $3.50 (and stay there) due to the increased debt or decrease in cash or does it go back up to $3.70 regardless?

    A share repurchase uses the money and retires an proportional number of shares adding debt, reducing share count, and thus effectively keeping the current share price the same.

    A special dividend disburses that money, lowers cash or increases debt and thus in effect makes the company worth less by the amount of the dividend. Since the share count remains static the company is worth pre-dividend value minus the dividend disbursed.

    Since SIRI is not issuing dividends and is unlikely to issue special dividends then share repurchases (which is what SIRI is doing) should be modeled.

    They're really not the same in effect on future share price. The immediate effect SHOULD result in the holder of equity seeing no increase or decrease in the value of their account at the point of event... but the are very different over time.

    Also taxes must be modeled into those special dividends. Share repurchases do not need to be modeled with taxes in mind.
    Jul 12, 2015. 12:28 AM | 1 Like Like |Link to Comment
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