Sirius Satelite Radio: Serious Upside Potential

| About: Sirius XM (SIRI)
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Sirius Satellite Radio Inc. (NASDAQ:SIRI) fell below its 50 DMA despite a lot of good numbers and a full-bore marketing blitz including a two-day free trial of the Howard Stern show available as a stream to your computers. This is very likely a way to introduce paid podcasting of SIRI content. There is also a 1 cent Howard TV preview on November 3-5 right after the October 30th earnings report.

Would Howard want to schedule a series of major events to bookend a disappointing quarter, or are 32 analysts incapable of analyzing a subscription model? Howard came on the air in January, and revenues for the last 6 quarters were:

Sirius 2-year Daily Chart 23 10 062005: $43.2M, 52.2M (23%), $67M (28%), $80M (19%) 2006: 127M (59%), 150M (19%). For Q3, analysts are anticipating just 168M in sales, a 12% gain based on SIRI's addition of 441K subscribers (9%) at $12.95 each. What is not taken into account is the sale of 441,000 new units which, although unprofitable, do generate revenues, as well as the bulk of the 600K Q2 subscribers coming off their discount trial periods.

I don't play SIRI for a quarter, as earnings are too erratic, but they still look like a long-term winner to me, and I still like the stock anytime it hits $3.69 but I'm willing to go crazy and pay $3.72 this week!

Read all of Phil Davis's articles on Seeking Alpha.