By Relmor Demitrius -

Sirius XM Radio (NASDAQ:SIRI) filed its 10-K Annual Report on Thursday, February 25th.  It was another strong quarter for the company, improving further on their operating income and free cash flow year to year.  Also reporting this week was Liberty Media, which owns 40% of Sirius XM, within Liberty Capital (Nasdaq:LCAPA).  They also mentioned all the positives about the company, and that they may seek to add more shares in it as well.  Not many I’m assuming, as they cannot add more than 4.9% more right now, according to their own agreement with Sirius XM.  They could add more than that after 1 more year, but more likely 2 years would be the target time frame for anything to happen in this area.

Highlights include:

• Positive Free Cash Flow for the entire 2009 year.
• Have had two consecutive quarters of positive subscriber growth.
• Reported that almost 100 percent of the royalty rate charges had hit subscribers, of ones that could possible be charged.
• Positive Operating Income
• Beat EBITDA estimates and guidance for 2009.
• Reported Break Even Earnings, beating the street consensus by 200%.

Despite paying down outstanding bonds, huge interest payments on their debt, and it being one of the worst economic years in decades, Sirius XM left 2009 with around the same amount of cash on had they started the year with, and even added 3 million to their totals in Q4 from Q3 of this year. Read the rest of this entry →

By Relmor Demitrius -

By now product reviews, projected sales information based in some reality, and media input aplenty is out on Motorola Inc.’s new smart phone (NYSE:MOT), the Droid.  The Droid was the first smart phone to utilize Google’s (NASDAQ:GOOG) new Android 2.0 operating system, introduced as a direct competitor to the Blackberry and Iphone operating systems, as well as the Palm, which is reportedly not doing well.  With any technology that has fans that are loyal to other products, getting a real feel for consumer sentiment on any new technology is risky at first, and best left instead to time.  Enough time has now passed for a good feel on this phone to be achieved.  Sales numbers appear to be decent to good.  The reviews on the phone itself are mixed, but mostly positive.  It has been as boldly called the Iphone Killer (which is ridiculous) to a washed up attempt to catch up in the smart phone space that is going to fail miserably(even more ridiculous). What is that old saying?  Somewhere in the middle lies the truth?  I think that is exactly the case here.

I don’t think the phone will be a failure, but the Droid has much competition, even within the same Android 2.0 market it uses to run its phone.  Since HTC offers the same operating system (OS) at the same dealers as does the Droid, there is competition even amongst the OS users themselves.  Imagine two very similar phones called the Blackberry and the Redberry, each phone basically the same.  Of course it would affect sales of the Blackberry.  Not only does Motorola have to compete with other smart phones, it has to compete with other smart phones running the same OS as they are.  Was Motorola blindsided when Google released and marketed heavily its version, the Nexus One?  Maybe, maybe not.  Would Motorola had done anything differently anyway?  Probably not.  Regardless, they did the right thing partnering with Google.  Read the rest of this entry →

By Relmor Demitrius -

As reported in recent weeks, institutional ownership in shares of Sirius XM Radio (NASDAQ:SIRI) have been increasing.  This is especially significant due to the distressed price levels the equity was experiencing and institutional interest in a stock that is bottoming is crucial in gauging street sentiment going forward.  Basically the thinking is this,  if an institution doesn’t want to buy a stock when its under $1, maybe you shouldn’t either.

As these reports are sometimes not arriving until 2 months or more after the actual purchase of the stock, it would behoove one to be careful and diligent when interpreting this information.  Many factors should also be considered when looking at an institutional ownership report.  What was the price action during that period versus current prices?  Was the stock in an uptrend or downtrend? What does the fund do?  Is this fund the end holder?  Do they tend to trade or invest in the company?  What is this funds trading pattern with the equity?  As you can see this is no exact science.

Reports from Q4 institutional holdings are now arriving.  I try to focus only on the top holders, and in this equity I am looking at institutions who hold more than 10 million shares.

Vanguard Group, Inc. has added 6.3 million shares in the fourth quarter of 2009.  They already held 153 million shares before this addition in Q4, and were their largest shareholder, not counting of course the 40% preferred stake Liberty Media, through Liberty Capital (Nasdaq:LCAPA) owns in the company.

Vanguard first added large amounts of shares in Sirius XM Radio on the Q3 report in 2008, well after the merger financing was known about, and before so many recent improvements in the balance sheet have been made.  Vanguard was a believer apparently in the business model of the combined companies from day 1. Read the rest of this entry →

By Relmor Demitrius -

Video rental giant Blockbuster Inc. (NYSE:BBI) released its fourth quarter financial results in January of this year.  They showed declining year to year revenue and a large loss per share, although this was due mainly to a one time goodwill charge.  At a quick glance one might think twice about throwing money at this stock.  The results were not impressive to the street apparently.  The stock has been under pressure of late, but has rebounded nicely the last two days, rising from a low of 30 cents to over 39 cents as of Friday.  The stock was trading over 70 cents in January before S&P put them on credit watch after the company released Q4 numbers.

The company currently sits at a 48 million dollar market cap.  They only have 122 million shares, and a large percentage of them are insider owned.  The company reported 42 million in free cash flow during their fourth quarter.  These are a few of the basic reasons I am keeping an eye on this equity.  Yes they have a high cost basis, and declining revenue trends doesn’t sit well with investors, but anytime a market cap is presented this low on a once largely profitable company, that is now dominating the market share of an albeit fading business model, it definitely should be looked at closely.  If this company were to rebound, this stock is currently priced for a huge dilution, bankruptcy, or a hostile takeover attempt, large gains are on the board.  If these things can be avoided, and certain goals of management are seen to fruition, then there is a possible play here.   CEO Jim Keyes has been on a path of promoting change with the company, and trying to show to the street that the company is committed to lowering costs, and moving into the digital age of media distribution.  He thinks the brand name is strong and will aid them greatly in stealing market share from Netflix and Redbox.  It is possible that Blockbuster can credit some of their revenue losses on too many unprofitable stores and a down economy.  Blockbuster is currently in the process of cutting the fat on their bloated retail store numbers, and the economy seems to be improving. Read the rest of this entry →