Entering text into the input field will update the search result below

Should you be serious about Sirius?

May 10, 2011 11:27 AM ETSIRI
Jim Van Meerten profile picture
Jim Van Meerten's Blog
Please Note: Blog posts are not selected, edited or screened by Seeking Alpha editors.

 Normally I do not like to follow penny stocks (stocks under $5).  They are hard to get financial information on and aren't followed by the brokerage firms.  There are bottom feeding vultures that like to short penny stocks then bombard the Internet with negative info so the stock tanks then they close their positions before the issue recovers.

 Sirius XM Radio (SIRI) is an exception. It came up on my Barchartscreener when I was looking for stocks trading over 100K shares and hitting frequent new highs.  The momentum and sales and earnings projection are worth watching.

Sirius Satellite Radio (SIRI) is building a digital satellite radio system that will broadcast up to 100 channels of music and entertainment programming to motorists throughout the continental United States. The company plans to offer channels of commercial-free music and channels of news, sports and entertainment programming for a monthly subscription fee. Sirius Satellite Radio has an exclusive agreement with Ford Motor Company to install Sirius receivers in Ford vehicles.  The company has an advantage of being an offering in new vehicles and sells not only the services but the equipment as well.
Factors to Consider:
Technical Factors:
  • 96% Barchart technical buy signal
  • Trend Spotter buy signal
  • Above its 20, 50 and 100 day moving averages
  • 15 new highs and up 25.57% in the last month
  • Relative Strength Index is 72.39% and climbing
  • Trades around 2.21 with a 50 day moving average of 1.84
Fundamental Factors:
  • Although this is a penny stock (under $5) it is followed by 10 Wall Street brokerages
  • Brokerage analysts have released 4 strong buy, 4 buy and 4 hold recommendations for aggressive investors
  • Sales are expected to increase by 8.10% this year and 10.60% next year
  • Earnings projections are very aggressive with estimates of an increase of 200.00% this year, 66.70% next year and over 30.00% annually for the next 5 years.
  • Many of these projection are tied to the increase in new car sales that have this radio as a standard offering
General Investor Sentiment:
  • One of the most widely followed penny stocks on Motley Fool with 5,856 readers giving an opinion
  • CAPS members vote 4,161 to 960 that the stock will beat the market
  • The more experienced All Stars vote 533 to 202 for the same result
Summary:  Even though this is a widely followed and positively rated stock by both the professional and individual investor it is a penny stock with over 270 million shares shorted which equates to about 5 1/2 days volume.  This is a stock for only the most aggressive and seasoned investor or better yet speculator and should only be purchased with a stop loss in place.  In adding it to my Barchart Van Meerten Speculative portfolio.
Jim Van Meerten is an analyst for  Marketocracy Capital Management.  He shares his knowledge and experience from over 40 years of investing in stocks, mutual funds and ETFs on Barchart.com  in his daily blog -- Barchart Portfolio Blogs.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

Recommended For You

To ensure this doesn’t happen in the future, please enable Javascript and cookies in your browser.
Is this happening to you frequently? Please report it on our feedback forum.
If you have an ad-blocker enabled you may be blocked from proceeding. Please disable your ad-blocker and refresh.