Why This Isn't a Sirius Rally

Is Sirius XM Radio (Nasdaq: SIRI  ) headed higher or lower? That's the question we ask when we evaluate insider buying and selling. We ask because how executives spend their paychecks is often a reflection of what they think of their companies' prospects.

Of course, not all buys are equal. According to two decades worth of research from Dr. H. Nejat Seyhun compiled in his book, Investment Intelligence from Insider Trading, buying is most predictive when it (a) comes from the CEO or other top-level executive, and (b) it's performed in bulk. Seyhun found buys of between 10,000 and 100,000 shares to be most informative.

How do Sirius XM's managers measure up against Seyhun's benchmarks over the past year? See for yourself:

Insider Rating Bearish
No open market buys and some high-volume sales. Options holders also cashing out in full.
Business Description The only remaining viable satellite radio provider.
Recent Price $1.40
CAPS Stars (Out of 5) **
Percentage of Shares Owned by Insiders 0.52%
Net Buying (Selling)* ($2.27 million)
Last Buyer (% Increase) None over the past 12 months.
Last Seller (% Decrease) Dara Altman, Chief Administrative Officer
53,898 shares at $0.98 apiece on May 25, 2010
(Sale reduced direct holdings by 6%.)
Competitors Apple (Nasdaq: AAPL  )
CBS Corp. (NYSE: CBS  )
Time Warner (NYSE: TWX  )

Sources: Form 4 Oracle, Capital IQ, and Motley Fool CAPS. (Data current as of Oct. 14.) * Open market sales and purchases only.

What we're tracking here, and why
Insider buying data can be confusing. Here, I'm concentrating only on buying and selling conducted in the open market. With most of these transactions, insiders control the timing. Other times they're buying or selling under the purview of a 10b5-1 plan. Either way, personal holdings are being bought and sold.

Those personal holdings matter the most -- they're the shares executives hold for investment, rather than compensation. Employee stock options are different; they're compensatory in the purest sense. I've stripped out options-related buying and selling from the calculations you see above.

The Foolish view: bearish
For as much as I've come to appreciate the beauty of Sirius XM's service, there are still questions about its valuation and balance sheet. This is, after all, a company that paid more in interest to service debt than it generated in operating income last year.

And yet there's no doubt the business is improving as subscribers find the service. Sirius XM added 334,727 accounts more than it shed during the third quarter. Management is capitalizing on that momentum with a plan to sell $550 million in new long-term debt, the proceeds from which will be used to refinance existing debt due in 2013.

This is the sort of business momentum terrestrial competitor Westwood One (Nasdaq: WWON  ) is desperately seeking yet failing to find. Instead, the company has experienced declining revenue as well as negative free cash flow and returns on capital.

By contrast, Sirius XM Radio has grown even as smartphones have taken off, and taken on features that make them more like streaming digital media players.

With all this good news, I'd expect to see insiders buying. Instead, four of them have sold over the past year. Why? Maybe it's because Sirius XM is no longer priced for bankruptcy but instead for outsized growth, and that makes owning the stock riskier today than it was a year ago.

As my Foolish colleague Rick Munarriz says: "Given its slow (yet accelerating) growth and its meager (yet improving) margins, $11 billion isn't cheap despite Sirius XM being the only game in town. Catalysts will have to justify the market premium."

Do you agree? Disagree? Log into Motley Fool CAPS today and tell us how you would rate Sirius XM Radio. You can also add the stock to your watchlist.

And if you want me to take a Foolish peek at the insider action of your favorite stock, email me here or use the comments box below. I'll write this column as often as you, our readers, demand.

For further Foolishness featuring Sirius XM Radio:

True to its name, The Motley Fool is made up of a motley assortment of writers and analysts, each with a unique perspective; sometimes we agree, sometimes we disagree, but we all believe in the power of learning from each other through our Foolish community.

Apple is a Motley Fool Stock Advisor selection. Try any of our Foolish newsletter services free for 30 days.

Fool contributor Tim Beyers is a member of the Motley Fool Rule Breakers stock-picking team. He had stock and options positions in Apple at the time of publication. Check out Tim's portfolio holdings and Foolish writings, or connect with him on Twitter as @milehighfool. You can also get his insights delivered directly to your RSS reader. The Motley Fool owns shares of Apple and is also on Twitter as @TheMotleyFool. Its disclosure policy has its eye on you.


Read/Post Comments (31) | Recommend This Article (13)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On October 14, 2010, at 9:51 PM, mlrinc10 wrote:

    Nothing I like better than an inaccurate article. Geez! It was a 700 million dollar offering which reduces the complaint of debt servicing costs referred to earlier in the article. No mention of how much this is being reduced interest rate wise or the new more favorable debt ratings. Typical MF only the bad news for Sirius XM.

  • Report this Comment On October 14, 2010, at 10:06 PM, waterinfo wrote:

    Insider buying is pretty much universally accepted as a bullish sign. However, insider selling in not necessarily bearish, and in many cases turns out to be bullish.

    Insiders accumulate huge blocks of stock and stock options, and have very narrow time windows during which they can diversify their portfolios by disposing of some of their shares. I have been an insider at some very large public corporations, and executives are always encouraged to hold large quantities of the company's shares. Yet, like all other investors, sometimes the executives buy a house, pay college tuition, upgrade their yacht.....whatever. If they are overweighted with their own company's stock, it is the appropriate vehicle with which to raise cash.

    In the case of SIRI, I'm guessing that the exectives that have sold shares over the last year, still retain huge personal interests. In the case of Ms. Altman cited above after selling her shares in June, she still had more than 800,000 shares. Not only that, the shares she sold were up more than 60% from the first of the year. I'll bet that she is also olding sub-dollar options for thousands more shares.

    I would expect that after the next quarterly earnings report you find strong insider buying among SIRI execs.

  • Report this Comment On October 14, 2010, at 11:02 PM, bobbyboy222 wrote:

    Is this really the same Company that just 6 hours ago wrote " However, once again, Sirius XM's fundamentals continue to improve. When "valuation" becomes the lone arrow in a bear's quiver, you know you must be doing something right"!!

    Come on guy's, decide what side of the fence your on.

    Maybe somebody shorted Sirius just before the close today? Who knows!

  • Report this Comment On October 14, 2010, at 11:18 PM, TMFMileHigh wrote:

    @bobbyboy222,

    >>Come on guy's, decide what side of the fence your on.

    With respect ... No. That's not what we do. We aren't the Borg. We are a team of analysts and writers with motley opinions and ways of analyzing stocks.

    In this case, what you have before you is data that shows a vastly improved Sirius XM run by insiders who don't own much of the company and who aren't yet willing to buy. That doesn't mean the stock is a sell -- or at least it isn't in my view -- but I also wouldn't buy right now. I'd like to see some insiders buying first.

    @mlrinc10,

    >>Typical MF only the bad news for Sirius XM.

    Hmmm. Either you're pretending to have read the article, or you're choosing to ignore my discussion of the improving business fundamentals.

    @waterinfo,

    >>Yet, like all other investors, sometimes the executives buy a house, pay college tuition, upgrade their yacht.....whatever. If they are overweighted with their own company's stock, it is the appropriate vehicle with which to raise cash.

    That's an important, salient point, and I thank you for making it. Just to be clear, though, we're talking about executives who've received very large cash payments in 2009. This doesn't appear to be need-based selling, though I'll grant it could be.

    Also, in some cases the sales were significant relative to overall holdings. CFO David Frear shed 36% of his direct stake in March.

    Again, I'm not arguing Sirius is a sell. What I'm arguing is that there's no insider conviction to go along with the recent rally. That's why I'm not inclined to buy shares.

    Thanks for the comments and Foolish best,

    Tim (TMFMileHigh and @milehighfool on Twitter)

  • Report this Comment On October 15, 2010, at 3:15 AM, FrostySnwer wrote:

    If you guys are so smart, would you buy a stock in your own company if you knew it would go up due to new developments in the company. If you do, I will come and visit you in prison for committing "Inside Trading" violations. Any person with 2 cents worth of knowledge of the Stock Market knows that, and any exec that buys with this risk hanging over his/her head would be a Motley Fool for doing it. So you geniuses, got any more lame excuses for why the Market is where it is today?

    The fact of the matter you guys went short on SIRI stock and you are trying to scare people into selling the stock to meet your stupid, bad business decision. You are what they call Manipulators. Please don't post anymore dumb articles on SIRI or other stock sites on yahoo.

  • Report this Comment On October 15, 2010, at 7:40 AM, TMFMileHigh wrote:

    @FrostySnwer,

    Thanks for writing.

    >>If you guys are so smart, would you buy a stock in your own company if you knew it would go up due to new developments in the company. If you do, I will come and visit you in prison for committing "Inside Trading" violations.

    Forgive me, but this might be the worst rationalization I've ever read. Allow me to put it this way: how many prosecuted cases of insider trading do you know relate to buying?

    The SEC has well-known rules for this sort of thing, and insiders that follow them are free to buy and sell shares as they please. And let's be clear: Sirius insiders *have* bought before, CEO Mel Karmazin, notably.

    >>The fact of the matter you guys went short on SIRI stock and you are trying to scare people into selling the stock to meet your stupid, bad business decision.

    The Fool owns stocks through the 11 o'clock portfolio and the various real-money services (Million Dollar Portfolio, Motley Fool Pro, etc.), but there is no institutional take on stocks the way you're describing. (See comment above.)

    To put it in your terms: the fact of the matter is you just don't like what I wrote about Sirius XM, and there's nothing more to it.

    >>Please don't post anymore dumb articles on SIRI or other stock sites on yahoo.

    With respect ... No. I have a duty to report what I see for the benefit of shareholders, and will continue to do so.

    Foolish best,

    Tim (TMFMileHigh and @milehighfool on Twitter)

  • Report this Comment On October 15, 2010, at 8:01 AM, pondee619 wrote:

    @bobbyboy222:

    We have to remember, this is not The Motley Fool it IS Those/These Motley Fools. And these fools are at it again. One side likes the stock the other will slam it. One fool says it is a good buy, the other says it is over valued. Come one come all these fools will give you an opinion, every opinion, on everything. Looking for direction, go elsewhere. Looking for data leading nowhere, this is your place.

  • Report this Comment On October 15, 2010, at 9:40 AM, stevenator65 wrote:

    I really appreciate when different writers from the same site write differing opinions. Why should all the writers agree? Just as the readers have many different viewpoints, so should the writers. In fact, if they all agreed I would be very suspicious.

    I own Sirius and want it to continue to rise. And the more positive articles posted about it, the better chance others' will buy, thus forcing the price up. But at the same time, I want to be aware of potential pitfalls, and articles like this one are beneficial.

  • Report this Comment On October 15, 2010, at 9:57 AM, Brent2223 wrote:

    While insider buying is interesting to look at, I think it's very dangerous to suggest basing investment decisions on this one piece of info. Especially with SIRI, as there is so much more relevant data coming out on a daily basis. And really, $2.3 mil net selling, that's a rounding error when looking at a company the size of SIRI. I come to investing sites to learn about the relevant issues to consider, and this article is just more noise leading people away from what's truely happening. Although I take it as a bullish signal when the bears start presenting arguements this weak.

  • Report this Comment On October 15, 2010, at 10:57 AM, cantbefoolish wrote:

    It's good cop - bad cop. That's what the Fool does. So, don't buy Tim and miss another 50% move up. How much have you missed out on so far, dumb dumberer?

  • Report this Comment On October 15, 2010, at 11:08 AM, TMFMileHigh wrote:

    @Brent2223,

    >>While insider buying is interesting to look at, I think it's very dangerous to suggest basing investment decisions on this one piece of info.

    No doubt this is true, but let's also be clear that I'm not making a don't buy recommendation based entirely on a lack of insider buying. To argue that would be to miss the entire point of the piece, which is to put insider transactions in context relative to the goings on with the underlying business.

    Also, I think it's dangerous to be so dismissive of insider transactions. One of the greatest investors of all time -- Peter Lynch -- has called insider buying one of the great buy signals available to use as common investors.

    @cantbefoolish,

    >>So, don't buy Tim and miss another 50% move up.

    Okay. But just out of curiosity, on what do you base your prediction for a 50% move? You haven't made a pick in CAPS so there's no way for us to tell how strong of a stock picker you are.

    Thanks for writing and Foolish best,

    Tim (TMFMileHigh and @milehighfool on Twitter)

  • Report this Comment On October 15, 2010, at 11:38 AM, cantbefoolish wrote:

    First off, I don't have time to waste on your CAPS. Second, you tell me first how much of a move you've missed to the upside, by being negative for the past year +, then I'll tell you how I predict another 50%.

    SIRI longs, let's not forget that the Fool is in competition with Sirius/XM. They are both media companies. So, it's in their interest to take down SIRI. Are we going to let that happen?

    I suspect, as usual, someone at the Fool, like Tim Beyers shorted the stock, before the close yesterday, then wrote this post, and covered in the morning. Too bad the SEC isn't aware of what's going on.

  • Report this Comment On October 15, 2010, at 11:51 AM, cantbefoolish wrote:

    Btw, about my stock picking.... the only buy I made today was BAC at $11.78. Was up about .40 on that within the first hour. I'd buy some SIRI if it goes to $1.30, since I sold a few of my shares, ahead of your post @ $1.40. Just like the insiders, I take a little off the table on the way up, because I know jerks like you will print some nonsense to bring the stock down.

  • Report this Comment On October 15, 2010, at 11:57 AM, TMFMileHigh wrote:

    @cantbefoolish,

    So no analysis, just hot air? So be it.

    And for the record, I have no idea how much upside I've missed. What I know is that I've beaten the market by more than 7% a year over the past seven years. I've no reason to regret my failure to catch the Sirius knife as it was falling.

    >>I suspect, as usual, someone at the Fool, like Tim Beyers shorted the stock, before the close yesterday, then wrote this post, and covered in the morning. Too bad the SEC isn't aware of what's going on.

    And here come the wild, libelous accusations which can't be proven because they aren't true. As always, my positions may be found here:

    http://my.fool.com/profile/TMFMileHigh/info.aspx

    Foolish best,

    Tim (TMFMileHigh and @milehighfool on Twitter)

  • Report this Comment On October 15, 2010, at 11:58 AM, cantbefoolish wrote:

    .... And wasn't it you Tim, who wrote the "President's Plan to Destroy Sirius" post, back when the stock was trading below $.30?

  • Report this Comment On October 15, 2010, at 12:05 PM, cantbefoolish wrote:

    It's not libelous to say that I "suspect"... unless you made a libelous accusation about the President.

    There are a plethora of reasons why I predict SIRI will go up another 50%, and they've already been mentioned here before. Go back and read what the longs have posted.

  • Report this Comment On October 15, 2010, at 12:27 PM, TMFMileHigh wrote:

    @cantbefoolish,

    >>And wasn't it you Tim, who wrote the "President's Plan to Destroy Sirius" post, back when the stock was trading below $.30?

    Don't know the price or what you're accusing me of, but I did write that piece, which was about the administration's sponsorship of wireless broadband and the effect that could have on Sirius XM. Find it here:

    http://www.fool.com/investing/high-growth/2009/03/04/the-pre...

    >>There are a plethora of reasons why I predict SIRI will go up another 50%, and they've already been mentioned here before. Go back and read what the longs have posted.

    Dodging the question. That's your right, of course, but it also makes it impossible to take your comments seriously. Moving on -- best of luck with your position. I do hope Sirius moves another 50% for you and the other longs.

    Foolish best,

    Tim (TMFMileHigh and @milehighfool on Twitter)

  • Report this Comment On October 15, 2010, at 1:34 PM, cantbefoolish wrote:

    Here's' some more of my recent trading. Just sold DTO, $3.00 higher than what I bought it at, two days ago. Then bought UNG, $.30 below what I sold it at, two days ago. How's that for hot air?

    About SIRI, the recent news that they raised $700M, to push back debt further, at a lower rate, and the fact that earnings and subs are increasing, while expenses are shrinking..... should give it more upside. When SIRI was trading at $8, it wasn't as strong of a company as it is now, combined with XM. By the time SIRI was at $.06, I had around 45k shares. Now, I have just over 30k, as I've been trading in incriments on the way up.

    As for you, I looked at your personal page. Judging by your educational background, I assume you had a Christian upbringing. This could be why you have something against Howard Stern being successful, because he goofs on dopes like you, who pray to an invisible dude in the sky for him to fail.

  • Report this Comment On October 15, 2010, at 1:51 PM, cantbefoolish wrote:

    March 9, 2009 is when you wrote that piece. SIRI was trading at $.15. Yep, the President really destroyed it, didn't he? Haha. Btw, has Mel Karmazin sold any of his shares?

  • Report this Comment On October 15, 2010, at 1:53 PM, dstnewman wrote:

    Hey Tim,

    I appreciate you bringing up insider buying, but think that it just doesn't hold water at this point. Sirius Execs have been underwater on their investments just as long if not longer than us common folk. During 2009 and the first part of 2010, Sirius XM execs were paid their bonuses in stock which were sold according to the arrangement you mentioned in your article. Most of these were made at under 50 cents per share. There have also been shares sold for tax purposes, with a majority of the shares being kept in their personal portfolio.

    You mention that it would be hard to buy at this point due to valuations, but you don't say what valuation you are basing that metric on. Are you arguring on earnings per share? EBITDA? Sales? Regardless of WHAT metric you are basing this off of, you also have to figure in the time frame. One of the best measures for valuating Sirius XM right now is based off of EBITDA. Do you look 3 months in the future and base it off of 2010 EBITDA? 2011 EBITDA? 2012? If you look at most of the projections out there, many analysts are forecasting between 18 and 24% EBITDA growth on an annual basis over the next 3-5 years. Sirius XM is currently looking at about 17X 2010 forecasted EBITDA. If you push that out a year or 2, that multiple drops significantly. Factor in 2012 EBITDA, or even keep the same 17x multiple currently, and tell me what your valuation tells you.

    It tells me that there is still significant upside to this company, which means that it is a buy, albeit probably after a pullback into the 1.25-1.30 range.

    BTW: If you want to compare CAPS scores, I win. =)

    Foolishly submitted,

    Brian "Newman" Rayl

    http://satelliteradioplayground.com

  • Report this Comment On October 15, 2010, at 4:42 PM, my2cents4u wrote:

    "We aren't the Borg. We are a team of analysts and writers with motley opinions and ways of analyzing stocks"

    True, but

    a. who pays your salary?

    b. what is your current and average rate of return?

    c. can we really trust anyone in the media these days to be truthful, factual, and unbiased?

    Isn't your guess just as good as anybody elses? Isn't the stock market still just a confidence game of insiders and patsies? Why would any company worth a damn raise capital this way anymore?

  • Report this Comment On October 15, 2010, at 6:12 PM, ThongLover854 wrote:

    Tim...you said the following...

    "With all this good news, I'd expect to see insiders buying. Instead, four of them have sold over the past year. Why? Maybe it's because Sirius XM is no longer priced for bankruptcy but instead for outsized growth, and that makes owning the stock riskier today than it was a year ago."

    I agree with your concern, but strongly disagree with a portion of your argument and your article headline choice, which may or may not have been up to you.

    First, you say that owning the stock now is riskier than it was a year ago. Really? Do you really believe that SIRI is way overvalued and a more risky investment now? Sirius was under a dollar long enough to almost get it kicked down to the pink sheets...there was bankruptcy fear...auto dealers were selling way few cars than normal...the economy was in the worst tail spin it's seen in decades.

    SIRI is doing nothing but the right things as it moves further and further away from the time of negative earnings. As it barely made a profit last year i believe ($150 million or so?), it continues to add subs, decrease expenses and add to its' service. With CapEX decreasing sharply for the next few years and debt being pushed out and reduced, there is truly nothing that can stop this steamroller at this time.

    It's hilarious that you say owning SIRI is riskier now. I bought a small amount of shares at around $7...just a few hundred shares. I loved the service and believed in it and was shocked to see it nosedive and was shocked at the unacceptable amount of time it took the FCC to approve the merger...practically killing the stock in the process. But i believed...

    I backed up the truck and purchased tens of thousands of shares at .08 and .15, spending a few thousands dollars to get a bunch of shares. And then i waited...and listened...and read...sometimes reading articles from this site or other sites that made me want to vomit. Articles timed so obviously to harm the stock or put a decisively negative spin on the current outlook of SIRI...

    Sometimes these articles would have obviously outlandish headlines to pull in the clicks and the ad dollars...just like this one.

    "Why This Isn't A Sirius Rally?" ---- come on Tim...you don't think a 50% increase in a stock price over the course of a few weeks is pretty serious? I do and most people would agree. You don't think a stock rising from .05 to 1.45 over the course of a couple of years isn't miraculous? I sure think it is and most people would agree.

    You are posing an interesting question regarding the insiders actions, but i really don't think much can be assumed. The share sale mentioned above of 50K+ shares isn't a substantial sale as you mention...just 6% of her direct holdings. Insiders hold .50% of all shares, but keep in mind there are almost 4 BILLION SHARES!

    How about the increase in Institutional Shares? That's something you can write about next possibly? And the bullish outlook on that front? Up to 25% i believe...and increasing daily...

    Or the decrease in the short position? That's another article to write...a pretty good one, i would say. You could couple it with the stock minipulation, flash trading that has taken place in recent years that the SEC is supposedly looking into. I would guess that SIRI has been negatively affected by this over the years.

    My belief is although you may have this opinion on insider share activity, i truly believe there are many, many other stories more substantial regarding SIRI at this time...

    1. How will SIRI go about decreasing outstanding shares and debt in the future as it turns cash rich?

    2. What is the likelihood of a subscription price increase next year and how will an increase affect the bottom line.

    3. Will Howard re-sign and if so, will he be on the SIRI apps finally?

    4. SIRI 2.0 --- Could the next SIRI hoiday offering take Sirius to another level of in-car entertainment...

    And on and on...

    Finally, a final comment in defense of you and the Motley Fool. You may write stories i believe in or stories i don't care for...i may be a fan or an enemy on a particular morning. But what i won't do is be a complete jackass and call you names or degrade you or your company. You are a media outlet with various opinions. If i don't agree with one, i won't write and spew hate and disgrace myself like some of the posters above. Their comments for the most part are childish, sad and uncalled for...

    Long SIRI...btw...this IS A SIRIUS RALLY...:-)

  • Report this Comment On October 16, 2010, at 8:07 AM, TMFMileHigh wrote:

    @dstnewman and @ThongLover854,

    Thank you very much for your well thought-out comments. Terrific stuff. Let me try and address most of what you're asking.

    >>Are you arguring on earnings per share? EBITDA? Sales? Regardless of WHAT metric you are basing this off of, you also have to figure in the time frame.

    Vyer true. The best metric for historical purposes is revenue, if only because Sirius XM doesn't have a long record of positive EBITDA.

    Going by the historical data in Capital IQ, Sirius traded for 1.24 times estimated revenue on Feb. 11, 2009, days before the Liberty deal. Today the multiple has more than doubled, to 2.78. That's why I wrote that Sirius is no longer priced for bankruptcy but instead outsized growth.

    >>BTW: If you want to compare CAPS scores, I win. =)

    (Grins.) Well done, sir. You've got me beat on accuracy and overall rating, but I still have you on points, thanks in no small measure to a 10-bagger in Green Mountain Coffee Roasters.

    >>First, you say that owning the stock now is riskier than it was a year ago. Really? Do you really believe that SIRI is way overvalued and a more risky investment now?

    Yes, I think the risk-reward profile has changed. Last year at this time, Liberty had given Sirius XM the cash infusion it needed, yet the stock was still priced as if the Great Recession would kill the company.

    >>Articles timed so obviously to harm the stock or put a decisively negative spin on the current outlook of SIRI...Sometimes these articles would have obviously outlandish headlines to pull in the clicks and the ad dollars...just like this one.

    Reading the full thesis you lay out I can understand why you believe this, but I can assure you that we don't ever try to harm investors or damage stocks.

    We do, however, offer unvarnished opinions based on the facts as we have them, and for a lot of years, the truth about Sirius' financials was that they looked unsustainable. I'm glad to see that finally changing.

    >>"Why This Isn't A Sirius Rally?" ---- come on Tim...you don't think a 50% increase in a stock price over the course of a few weeks is pretty serious?

    No question this *has* been a serious rally over the past few weeks. The headline and this story refer to whether the rally is sustainable. Without insider conviction, I don't believe it is. That said, there does appear to be a long-term uptrend here, and I can see a multi-year rally taking place after the stock takes a breather to absorb the good news that's driven it to present highs.

    >>How about the increase in Institutional Shares? That's something you can write about next possibly? And the bullish outlook on that front? Up to 25% i believe...and increasing daily...

    I took a brief look at this and will have to do a follow-up -- thanks for the suggestion -- and it appears the sentiment is mixed.

    BlackRock and Federated Investors are the biggest buyers, both of which have more than doubled their commitment since December, but some big-name institutions have also reduced their exposure to Sirius XM as of June 30. Notably: Vanguard and T. Rowe Price. Overall institutional ownership stand at 19.05%, according to Capital IQ.

    >>1. How will SIRI go about decreasing outstanding shares and debt in the future as it turns cash rich?

    Honestly, I think this is the most important question. Sirius needs to be free to invest and innovate, and debt gets in the way of that. The current refinancing should help tremendously.

    Thanks again to you both for writing. I really enjoyed these responses and the thinking that went into them.

    Foolish best,

    Tim (TMFMileHigh and @milehighfool on Twitter)

  • Report this Comment On October 16, 2010, at 8:22 AM, TMFMileHigh wrote:

    @my2cents4u,

    Thanks for writing.

    >>a. who pays your salary?

    I do. I'm a self-employed writer and analyst, though the Fool is my oldest and largest client.

    >>b. what is your current and average rate of return?

    By current I'm assuming you mean YTD, which is 12.01% versus 3.89% for the S&P.

    My historical rate of return 8.74% annually since March of 2003.

    >>c. can we really trust anyone in the media these days to be truthful, factual, and unbiased?

    That's a philosophical question only you can answer for yourself. What I can promise you is that I'll tell truth here and try hard not to screw up the facts. (But I have and will continue to make mistakes.)

    What I can't promise you is unbiased reporting. We don't do that here. The Motley Fool is investors writing for investors. Our intent is to analyze and take a stand.

    >>Isn't your guess just as good as anybody elses? Isn't the stock market still just a confidence game of insiders and patsies? Why would any company worth a damn raise capital this way anymore?

    Maybe I should be that cynical, but I'm not. Long-term investing has been good to me and I think it will continue to be good to me.

    FWIW and Foolish best,

    Tim (TMFMileHigh and @milehighfool on Twitter)

  • Report this Comment On October 16, 2010, at 3:15 PM, 8Lives wrote:

    Well done, Tim. Strength of the meek is unparalleled.

  • Report this Comment On October 16, 2010, at 10:09 PM, alorchip wrote:

    I've read all of the comments. Now back to the substance of this insider sell. It was about 5 months ago, and nothing since then, buys or sells. Point one - after the passge of some time a buy or sell loses significance. How much time? Seems that five months is too long but let's have some analysis on that from the experts. Point two, what ever the reason for this insider's sell, it was at 98 cents and now the stock is near $1.40. So this insider's sell expertise is not so good, based on this latest decision. So analysis on the accuracy of each insider's sell record would also be useful. For example if the market moves contrary to the insider's sells or buys that would be useful to know.

    On balance, I'd have toagree withthe critics that this analysis based on "old news" hs not been useful. Even if the analysis was made more contemporaneously around the time of the insider sell, those who became concerned about it would have given up a 40% ish gain in five months.

    Personal position: None but woulda, coulda, shoulda been a buyer, months ago!

  • Report this Comment On October 16, 2010, at 10:14 PM, dstnewman wrote:

    Hey Tim, shoot me an email would ya?

    Brian "Newman" Rayl

    newman@marketplayground.com

    www.MarketPlayground.com

    www.SatelliteRadioPlayground.com

  • Report this Comment On October 17, 2010, at 1:24 PM, cantbefoolish wrote:

    ThongLover, I think Tim needs to be degraded and called just about every name in the book, for being against SIRI, from $.15 to $1.40. If he thinks the company was overvalued at $.15, then you know where he stands.

    The first sentence of his piece ; http://www.fool.com/investing/high-growth/2009/03/04/the-pre... , was a flat out lie, no matter how he tries to spin it, and Tim is lucky that he's not in jail for that kind of libelous.

  • Report this Comment On October 17, 2010, at 2:02 PM, cantbefoolish wrote:

    The reason why I'm so passionate about this, is because Tim tried to flush my hard earned money down the toilet, to better his self. If he had it his way, I wouldn't be in the position that I am now, as well as many other SIRI longs. We lost the first half of the game, but there are two halves. Now we have the momentum, and you are losing the battle, Tim. Your latest feeble attempt to knock the stock, based on lack of insider buying, is laughable.

  • Report this Comment On October 17, 2010, at 2:37 PM, ikkyu2 wrote:

    Tim, quit wasting your time with these trolls. In the amount of time you spent replying to these yobs and yammerheads, you could have written another helpful, useful article like the above.

    FD: bailed out of my SIRI position at 1.37, taking the 40% and running.

  • Report this Comment On October 17, 2010, at 4:28 PM, TMFMileHigh wrote:

    @ikkyu2,

    >>Tim, quit wasting your time with these trolls.

    I appreciate the support, but to be fair, there have been some good comments in this thread. I'm glad for those exchanges.

    Foolish best,

    Tim (TMFMileHigh and @milehighfool on Twitter)

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