This Week in Sirius XM Radio

It was a busy week for Sirius XM in the satellite radio realm.

Jan 4, 2014 at 9:45AM

Things never get dull for the country's lone satellite radio provider. Shares of Sirius XM Radio (NASDAQ:SIRI) moved higher after three straight weeks of declines were followed by a flat one, climbing 1.4% to close at $3.57. The media darling's slight gain was fueled largely by an Evercore analyst upgrade on Friday. The analyst is boosting his price target to $4.50. 

There was more going on beyond the share-price gyrations, though. Liberty Media (NASDAQ:LMCA) waited until the week was over to announce that it will make Sirius XM a subsidiary. Sirius XM came under fire on reports that Google (NASDAQ:GOOGL) and Apple (NASDAQ:AAPL) are making a bigger push for the automotive dashboard market. The service's basic monthly rate increased to $14.99 a month. And on the streaming front, Pandora (NYSE:P) received a bullish analyst note. 

Let's take a closer look.

Liberty and justice for all
It's now been a year since Liberty Media assumed a controlling stake in Sirius XM, and it finally tipped its hand. Instead of cashing out at a huge profit or spinning off its stake to its own investors, Liberty's move is make it a wholly owned subsidiary by exchanging every Sirius XM share for 0.076 shares of a Liberty Series C stock. The move values Sirius XM at $3.68. It's not much of a premium, but that was the risk of letting Liberty take a majority stake. 

Attack of the titans of tech
The connected car has been available for years, and it hasn't hurt Sirius XM. Churn rates remain near historical lows, so folks aren't cancelling, and the subscriber count keeps hitting new highs with every passing quarter.

What happens if the smart car gets smarter? The Wall Street Journal reports that Google and Audi plan to announce a partnership during next week's International Consumer Electronics Show. The two companies plan to create an in-car infotainment platform based on Google's Android that will allow drivers to access music, navigation, and other applications.

Sirius XM has been able to thrive despite the growing ease of smartphone owners to use their handset's online connection to stream music services, but naturally there is some hesitation as to how powerful this new alliance may be.

Apple is also likely to make waves during CES. It introduced its "iOS in the Car" push several months ago, and it expects to have a dozen car brands embracing its platform this year.

The real question here is if Apple and Google are providing a platform that Sirius XM can use to its advantage or if it's leveling the playing field in a way that will make a premium satellite-radio subscription less compelling. For now, Sirius XM's conversion and retention rates show that it's holding up just fine.

Take a hike
Sirius XM announced in October that it will push rates up 3.5% in January. Programming and content costs per subscriber have moved slightly lower, so this will be an interesting test on pricing elasticity.

If consumers accept Sirius XM's new rate of $14.99 a month, it should have a very positive impact on the media giant's bottom line.

Pandora's pulse
Canaccord Genuity issued a bullish note on Pandora, with its analyst encouraged by the streaming music service's ability to milk more ad revenue out of its growing listener base. He thinks Pandora could push its revenue per 1,000 impressions north of $38 in its latest quarter, and his revenue target for the period is more than $10 million ahead of Wall Street's consensus top-line forecast.

Pandora's already been rolling on that front. Investors saw that in its previous quarter when revenue climbed three times faster than usage. The holidays appear to be playing out well, and that's huge, since it seems as if the mid-September arrival of Apple's iTunes Radio is helping more than hurting by validating the niche.  

Liberty Media isn't the only company with a big share price
Opportunities to get wealthy from a single investment don't come around often, but they do exist, and our chief technology officer believes he's found one. In this free report, Jeremy Phillips shares the single company that he believes could transform not only your portfolio, but your entire life. To learn the identity of this stock for free and see why Jeremy is putting more than $100,000 of his own money into it, all you have to do is click here now.

Longtime Fool contributor Rick Munarriz has no position in any stocks mentioned. The Motley Fool recommends Apple, Google, and Pandora Media and owns shares of Apple, Google, Liberty Media, and Sirius XM Radio. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

1 Key Step to Get Rich

Our mission at The Motley Fool is to help the world invest better. Whether that’s helping people overcome their fear of stocks all the way to offering clear and successful guidance on complicated-sounding options trades, we can help.

Feb 1, 2016 at 4:54PM

To be perfectly clear, this is not a get-rich action that my Foolish colleagues and I came up with. But we wouldn't argue with the approach.

A 2015 Business Insider article titled, "11 websites to bookmark if you want to get rich" rated The Motley Fool as the #1 place online to get smarter about investing.

"The Motley Fool aims to build a strong investment community, which it does by providing a variety of resources: the website, books, a newspaper column, a radio [show], and [newsletters]," wrote (the clearly insightful and talented) money reporter Kathleen Elkins. "This site has something for every type of investor, from basic lessons for beginners to investing commentary on mutual funds, stock sectors, and value for the more advanced."

Our mission at The Motley Fool is to help the world invest better, so it's nice to receive that kind of recognition. It lets us know we're doing our job.

Whether that's helping the entirely uninitiated overcome their fear of stocks all the way to offering clear and successful guidance on complicated-sounding options trades, we want to provide our readers with a boost to the next step on their journey to financial independence.

Articles and beyond

As Business Insider wrote, there are a number of resources available from the Fool for investors of all levels and styles.

In addition to the dozens of free articles we publish every day on our website, I want to highlight two must-see spots in your tour of fool.com.

For the beginning investor

Investing can seem like a Big Deal to those who have yet to buy their first stock. Many investment professionals try to infuse the conversation with jargon in order to deter individual investors from tackling it on their own (and to justify their often sky-high fees).

But the individual investor can beat the market. The real secret to investing is that it doesn't take tons of money, endless hours, or super-secret formulas that only experts possess.

That's why we created a best-selling guide that walks investors-to-be through everything they need to know to get started. And because we're so dedicated to our mission, we've made that available for free.

If you're just starting out (or want to help out someone who is), go to www.fool.com/beginners, drop in your email address, and you'll be able to instantly access the quick-read guide ... for free.

For the listener

Whether it's on the stationary exercise bike or during my daily commute, I spend a lot of time going nowhere. But I've found a way to make that time benefit me.

The Motley Fool offers five podcasts that I refer to as "binge-worthy financial information."

Motley Fool Money features a team of our analysts discussing the week's top business and investing stories, interviews, and an inside look at the stocks on our radar. It's also featured on several dozen radio stations across the country.

The hosts of Motley Fool Answers challenge the conventional wisdom on life's biggest financial issues to reveal what you really need to know to make smart money moves.

David Gardner, co-founder of The Motley Fool, is among the most respected and trusted sources on investing. And he's the host of Rule Breaker Investing, in which he shares his insights into today's most innovative and disruptive companies ... and how to profit from them.

Market Foolery is our daily look at stocks in the news, as well as the top business and investing stories.

And Industry Focus offers a deeper dive into a specific industry and the stories making headlines. Healthcare, technology, energy, consumer goods, and other industries take turns in the spotlight.

They're all informative, entertaining, and eminently listenable ... and I don't say that simply because the hosts all sit within a Nerf-gun shot of my desk. Rule Breaker Investing and Answers contain timeless advice, so you might want to go back to the beginning with those. The other three take their cues from the market, so you'll want to listen to the most recent first. All are available at www.fool.com/podcasts.

But wait, there's more

The book and the podcasts – both free ... both awesome – also come with an ongoing benefit. If you download the book, or if you enter your email address in the magical box at the podcasts page, you'll get ongoing market coverage sent straight to your inbox.

Investor Insights is valuable and enjoyable coverage of everything from macroeconomic events to investing strategies to our analyst's travels around the world to find the next big thing. Also free.

Get the book. Listen to a podcast. Sign up for Investor Insights. I'm not saying that any of those things will make you rich ... but Business Insider seems to think so.


Compare Brokers