clu.invesment

Loading Up for Some Sirius Gains

OUR GOLDMAN SOURCE SAYS THEY COVERED 27M SHORT SHARES LAST WEEK

Also: Traders Desk e-mail message

XM and Sirius previously traded hugely over-valued, when compared to their Book Value (P/B Ratio). Sirius, for example, had a book value of ($0.56), while they traded at $2; while XM’s was ($3.43) and they traded at $10.The current Pro-Forma Book Value is approximately $1.62 — and the stock is trading at $1.46. In other words, it is undervalued… for the first time ever. I wonder how many on the Street actually looked at the Pro-Forma condensed financials of the company filed last week? Given the fact that the Street had routinely overvalued this sector as individual companies — the fact that is undervalued as a merged company is interesting. Interesting because, if they can demonstrate some of what they’re claiming… then this undervaluation will likely correct quickly.

Last Friday I coverd a large short position and added a long position in SIRI I expect stock will see a Earnings run up this week to $1.75 range to $2 possible & I expect the stock will trade around 1.5x Book value before years end around $2.50 to $3 a share.

Watch for UBS to upgrade SIRI they did the deal & are buying on the open market Friday they crossed in 2 large blocks 9.7M & 7.6M.