Was Wienkes Right About Sirius XM?

By Rick Aristotle Munarriz | More Articles
May 26, 2009 | Comments (8)

Watch stocks you care about

The single, easiest way to keep track of all the stocks that matter...

Your own personalized stock watchlist!

It's a 100% FREE Motley Fool service...

Click Here Now

Fans of Sirius XM Radio (Nasdaq: SIRI ) won't like this, but this morning's Wall Street Journal taps Mark Wienkes as the top analyst covering the broadcasting and entertainment industries for 2008.

Wienkes was one of satellite radio's more vocal and pessimistic critics last year. He turned heads in December 2007, when he downgraded shares of XM to "sell." Then he really got investors talking in October 2008, when he slapped a price target of $0.25 a share on the freshly merged Sirius XM.

In retrospect, that call was generous. Sirius XM's stock price bottomed out at $0.05 fewer than four months later.

In awarding the analyst slot to Wienkes, WSJ ranked all 33 analysts in his area of specialization based on the performances of their picks and pans; Wienkes stood the tallest. He was bearish on terrestrial-radio network Westwood One, a stock that eventually was delisted and today trades for a handful of pennies. When he was down on Sirius XM, it also proved to be a nightmare for longs, shedding 96% of its value in 2008.

If Wienkes remains his sector's rock star in 2009, Sirius XM won't be a factor. He retired his rating on the company -- along with terrestrial penny stocks Entravision (NYSE: EVC ) and Entercom (NYSE: ETM ) -- in December.

That's good news for Wienkes, since Sirius XM shares have roughly tripled so far in 2009 -- even though the stock is still light-years away from the $3.03 price tag it fetched at the beginning of last year.

Sirius XM is no longer on a near-term deathwatch, after Liberty Capital (Nasdaq: LCAPA ) beat out EchoStar (Nasdaq: SATS ) to provide a critical cash infusion three months ago. Sirius XM's results are also improving nicely, though net subscriber counts shrank during the first quarter.

Automotive and economic recoveries should get Sirius XM back on the growth path, but for now, this is a story of cost containment. There was a troubling amount of insider selling last week -- disappointingly filed as we headed into the holiday weekend -- but we will have a little more color during tomorrow's annual shareholder meeting on Sirius XM's near-term direction.

Trading in Sirius XM will remain volatile. However, with Sirius XM likely to close out 2009 with positive stock gains, it's a good thing that Wienkes got out on top, just as Sirius XM was bottoming out.

Some other Sirius stories:

Best Odds in the Universe!
If you're interested in a 98.79% chance at beating the market... and a 70.84% chance at DOUBLING the market's return – Motley Fool Supernova could be just what you're looking for. And get this: We arrived at these odds from 10,000 random back-tested portfolios composed of Motley Fool Co-founder David Gardner's personal stock picks.

It's why David recently handpicked a small team of world-class portfolio managers. You see, he thinks these odds can get even better! And he'd like to prove it to you...

Simply enter your email address. And the answer to the question everybody is asking will be delivered to your inbox!

Longtime Fool contributor Rick Munarriz is such a fan of satellite radio that he subscribes to both Sirius and XM. He owns no shares in any of the stocks in this story and is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool has a disclosure policy.

Read/Post Comments (8) | Recommend This Article (14)

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 icon found on every comment.

Report this Comment On May 26, 2009, at 12:57 PM, yes90 wrote:

There wasn't 'insider selling' in the manner you are suggesting. The stock sales were 401k or stock plan related transactions (paying tax on vesting of restricted shares). Check your facts please!
Report this Comment On May 26, 2009, at 1:06 PM, detroitone wrote:

Here we go again. Yes, check your facts always against Sirius XM nothing else better to do. Who hired you people, I'm looking for a job, I know I can write better fact based stories than this. Come on.
Report this Comment On May 26, 2009, at 1:17 PM, dstnewman wrote:

The insider selling you speak of was simply a result of the company cutting cash bonuses and replacing them with stock bonuses. Just like everyone else, they had probably grown accustomed to depending on those bonuses to pay for stuff like a vacation or bills, and were forced to sell the stock this time if they wanted any cash.
You also fail to mention that the insiders did not sell NEARLY the amount of stock as compared to what they were given as a bonus. It sounds bad when you hear that insiders sold over 900k shares in stock, but sounds much better when you hear that they were given over 9,000,000 shares, and sold ONLY 900k. For instance, Patrick L Donnelly was given 1.63 million shares, and sold exactly 10% of them. Yes, he sold 10%, but HE KEPT 90%. The confidence is in the details my friend. Details that you happen to leave out in your story.
Report this Comment On May 26, 2009, at 5:05 PM, SiriusXMlifer wrote:

Yeah, lol, check out satwaves for gems about bumper stickers, Sirius XM definitely going bankrupt, and 2 million lost subscribers. Brandon does nothing but regurgitate the ideas of other wacky Sirius investors that participate in boards like this and yahoo.
SIRI investors need the opinions of a maniacal lunatic like "Brandon Matthews" like the need a hole in the head. Don't take my word for it, go read one of their articles featuring "factual reporting" and report back.
Report this Comment On May 26, 2009, at 6:40 PM, Bootluver wrote:

Oh please, 2008 SiriXM was just one thing...MANIPULATION from every angle possible. Stockmarket should come under Government control, weed out all the BS lies so investers can make safe assessments of what company's stock to buy. Enough with all the Foolish BS, its just a waste of time to have the Motely Fool run on the net anymore. Hang it up already!!!!
Jeff, DE
Report this Comment On May 26, 2009, at 9:36 PM, mberan wrote:

More manipulation talk about this stock. Investors saw it for what it was and dumped it, no manipulation. Anyone want to talk about the grassy knoll conspiracy too? As sound as the manipulation of SIRI. It's a penny stock and nothing more.
Report this Comment On May 27, 2009, at 9:27 AM, wordcarr wrote:

Sat radio as defined by SIRI will disappear.Radio is used by the majority for local content.Without the earth repeater stations that the sat company wanted but were denied by the FCC there will never be enought subs to make the company profitable.Wishhful thinking at best to expect sat radio to be anything more than what shortwave commercial radio was back a few years ago.
Report this Comment On May 27, 2009, at 9:30 AM, kaninbuehcibai wrote:

LOL...i can't stop laughing at motley fools one more time!
LET ME GUESS..WHO IS THE ONE THAT AWARDED THE ANALYST WIENKES THE TITLE?
OH yes..it was Wall street Journal....another crony. enough said.

Add your comment.

Compare Brokers

Fool Disclosure

DocumentId: 906601, ~/Articles/ArticleHandler.aspx, 2/14/2012 3:12:14 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated Moments ago Sponsored by:
	DOW	12,806.53	-67.51	-0.52%
	S&P 500	1,343.31	-8.46	-0.63%
	NASD	2,914.46	-16.93	-0.58%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes