cos10000

Where’s the Bottom for Satellite Radio Stocks?

$4.25 too conservative? Pas moi. To justify that valuation:

This company would have to grow its subscriber base substantially - 50% per year or more - reduce its churn below 1% - improve its conversion rate to 60% or better, and stave off the third-parties who are already getting in line for a piece of the profits.

Let's not forget shareholder dilution from stock options and stock-based compensation. Its only growth driver is the auto industry now. Even if they can manage to get the credit to buy a new vehicle, the interest rate will make them think twice about springing for a satellite radio subscription.

An irrational market could potentially push this stock's price to $4 per share, but even if it gets there (it won't), keep a firm grip on your ripcord.

Where’s the Bottom for Satellite Radio Stocks?

cos1000, DCF is imperfect. But if not DCF, what tool do you use to value this company? Hunches and giggles? DCF has faults, but it's better than blind guessing, herd mentality, and wishful thinking, which accounts for most of the rhetoric on this board. I don't see enough risk-adjusted upside beyond current levels enough to justify taking a position in this stock. There are simply too many better investment opportunities out there on a risk-adjusted basis for me to bother committing funds to this equity issue.

Sirius Satellite Radio is Seriously Undervalued

If the upside is so far above $3 per share, as you claim in your piece, then please quantify your statement. Rhetoric is cheap, but numbers drive value. Let's hear a dollar figure. Where is the ceiling? Tell us how you arrive at it.

If you are truly savvy and deserving of your own Seeking Alpha column, you'll do more than parrot Wall Street research and message boards. Share with us your basis for arriving at your "sell" price, beyond which this company will be overvalued.

Keeping investors informed goes beyond parroting Wall Street research and cheerleading a pet stock whose 10-K you likely have never bothered to read. Don't just goad your investing peers to buy. Offer them some real advice, and instruct them at what point they should sell.

I hear the sizzle. Let's see the steak.

Where’s the Bottom for Satellite Radio Stocks?

The cult mentality here is breathtaking.

This author's reports tend to parrot Wall Street research and media reports, with some benign commentary and speculation thrown in for good measure. I'd like to hear some real insight from this self-appointed satellite radio "expert":

What is this author's upside price target on SIRI? What is his "sell" price?

At what point does he think SIRI will be overvalued, and what is his basis for coming to that figure?

I hear the sizzle, but I don't see the steak. If the Goldman analyst is so inaccurate, let's hear the author's rationale and alternative target price, and how he arrives at it. What discount rate does he apply in his DCF analysis?

If $1.50 is the bottom, then where is the top?

As they say prior to takeoff, "keep in mind that the nearest emergency exit may be behind you."

Where’s the Bottom for Satellite Radio Stocks?

The relevant question isn't "where is the bottom?" The relevant question is "where is the top?"