By Relmor Demitirius -
The hits just keep on coming. Sirius XM Radio (NASDAQ:SIRI), after reporting solid numbers for Q3 and re-issuing guidance on growth (20% increase in revenue expected in 2010) and subscribers (positive growth projected for 2010) for the first time all year, has been receiving many upgrades as of late. The most important upgrade came last week, with the S & P raising Sirius XM’s credit outlook from Stable to Positive. This means, according to their own system, a credit rating upgrade could come soon. The last time the S & P raised Sirius XM’s credit outlook, they did indeed receive a credit rating upgrade shortly after. It is already at B-, and another improvement would send them into investment grade territory, which can equal huge interest savings on bond debt, and bank loans. That help goes right to their bottom line, as Sirius XM has been working fervently since 2009 began, to reduce debt, move debt due further out, and rework existing deals to lower interest rates. So far, Sirius XM has been very successful in the bond market in 2009, raising over 700 million dollars in new money. They then used this money to repay the Liberty deal from February, and to trim debt due this year.
Here are a few of Sirius XM’s recent upgrades:
Investors Business Daily™: Composite score of 85 out of 99, in comparison to other companies with stocks trading under $10. This basically means they are ahead of 85% of all other companies in the comparison. In comparison however, to only other media companies in this group, they rank 4th out of 25. This service combines elements of technical analysis with fundamental analysis in the scoring process. As a comprehensive site that takes into account all factors, this bodes very well for Sirius XM. This publication is also considered rather conservative as well.
This is very encouraging for a media company turning the corner in this difficult economic environment. Also Sirius XM is growing revenue when terrestrial radio is seeing a huge decline in the advertising based business model. It appears the quiet silent success story SIRI longs have enjoyed this entire year might be getting out of the bag soon. It is hard to keep good news quiet for long.
Also coming in from the newswires, Marketwatch™ has upgraded Sirius from avoid to neutral this week.
You might say, as a Sirius XM investor, all of this is well and good, but is anyone noticing? Sure they are. Institutional ownership in Sirius XM has gone up from 20% in Q2 to 25% in Q3. When stock prices are at an extreme low, it’s very bullish to see their long time stockholders add to their positions (Vanguard, etc..) and overall institutional ownership increase.
*** Sirius XM Weekend News in Review ***
This week Sirius XM is launching the Miles Davis station. Sirius XM will dedicate a 24 hour a day commercial free station to the celebration of the music of Jazz legend, Miles Davis.
This weekend Jim Cramer, TV personality as well as a former hedge fund manager, and a huge Sirius XM fan and subscriber, talked about his new book in Sirius XM’s studios. It was great to see Jim Cramer with the Sirius XM logo on display behind him. Seems even smart Wall Street players know where the good publicity is at these days.
Very nice article, Rel! Hope we get some more credit upgrades from Moody’s and Fitch as well as analyst upgrades…got to believe they will b e coming soon. Also, I am very encouraged by the Q to Q increase in institutional investment…looking for this trend to contiue up this quarter and on into the future… After Mel’s optimistic remarks about free cash flow moving upward…can’t but help catch the attention of institutions. Finally, the irony of Cramer being on SIRIUS radio is just too much for me…I think he and his cronies will be changing their tune sooner rather then later? The future of SIRIUS XM continues to brighten!