2-Star Stocks Poised to Plunge: Sirius XM?

Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, satellite radio services specialist Sirius XM Radio (Nasdaq: SIRI  ) has received a distressing two-star ranking.

With that in mind, let's take a closer look at Sirius and see what CAPS investors are saying about the stock right now.

Sirius facts

Headquarters (Founded)

New York (1990)

Market Cap

$14.7 billion

Industry

Cable and satellite

Trailing-12-Month Revenue

$3.3 billion

Management

CEO Mel Karmazin (since 2004)
Chief Content Officer Scott Greenstein (since 2004)

Return on Capital (Average, Past 3 Years)

10.3%

Cash/Debt

$556.3 million / $2.4 billion

Competitors

Apple (Nasdaq: AAPL  )
CBS
(NYSE: CBS  )
Pandora Media
(NYSE: P  )

Sources: S&P Capital IQ and Motley Fool CAPS.

On CAPS, 28% of the 789 All-Star members who have rated Sirius believe the stock will underperform the S&P 500 going forward.

Just last week, one of those Fools, latimerburned, succinctly summed up the Sirius bear case for our community:

Sirius has just never lived up to the enormous promise, and their merging with chief rival XM Radio has yet to deliver market stomping returns. Sure, the company has been on a tear of late, and their latest earnings report gave investors reason to hope. Still, the company is not cheap, just barely profitable, and they're going to be leaderless come next year.

Further, I don't think investors should overlook Apple. Not only are there rumors that they'll be rolling out a streaming service, but with a simple adaptor you can bypass the radio and create your own station. I've been using my iPhone to play my iTunes playlists through my car radio for years now. There are just too many reasons not to be tuned into Sirius, and I think investors should tune out as well.

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Read/Post Comments (2) | Recommend This Article (6)

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 November 06, 2012, at 5:33 PM, dsandman999 wrote:

    It is a bit of a shallow article. Why don't you have the same numbers for a year ago. Better yet, go to Yahoo and do a 5 year interactive chart on SIRI. There are few wall street come-back stories as good as SIRIs since Feb. 2009.

    You also need to add FCF (Free Cash Flow) to the table since that is used more than EPS in the entertainment industry.

    I am not sure what your Caps investors are looking at unless it is their SIRI shorts or their (P)andora stock heading for the bottom since AAPL is a much bigger threat to them than to SIRI. It is obviously not based on their Quartely 10Qs.

  • Report this Comment On November 06, 2012, at 6:31 PM, duze54 wrote:

    Buried in your article is the Key to your CAPS community 28% rate it an underperform. What the F is this going negative and quoting a guy that wrote earlier. It sounds to me it has 72% positive Caps "All-Stars investors" behind a better rating! Go with the majority unless MF has an adgenda. Trying to load up-LOL

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