Archive for January, 2010

1

S & P Raises Sirius XM Corporate Credit Rating To B from B-

By
king1
– January 27, 2010
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By Relmor Demitrius

S&P credit rating agency raised Sirius XM’s (Nasdaq:SIRI)  corporate credit rating from B- to B today.  They also are maintaining their Postive Outlook on the company, which means future upgrades are possible.  The news comes off of a press release from Sirius XM earlier this month citing continued subscriber growth, and meeting free cash flow guidance for the year.  For the entire year of 2009, Sirius XM Radio achieved positive FCF of over 100 million dollars.  This is almost a 600 million dollar reversal from 2008. 

S&P also cites high leverage debt and weak auto sales as potential future concerns.

More news on this issue later.

Please visit www.kingofalltrades.com/forum for up to the minute stock conversation and analysis.

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8

Sirius XM Fourth Quarter Earnings Preview

By
king1
– January 26, 2010
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This article has been updated at 5:30 MST, Jan 26th, 2010.  Corrections to Total Revenue have been made.  .006 cents a share actual earnings now predicted.

By Relmor Demitirius

Sirius XM Radio (Nasdaq:SIRI) is set to announce its 4th quarter earnings in February.  A press release from Sirius XM last week has offered a small glimpse at what will be expected when they officially release their 10-Q filing.  Before we delve into the Q4 numbers, let us first review what we were already given by the company.

The conference call was announced in the press release to be in February.  In Q4 they added 257,000 new subscribers.  They added 247,000 self pay subscribers, which means they are permanent paying customers, not counted as a subscriber from any promotional means.  This is a nice boost to a company already churning in free cash flow from last quarter.  Sirius XM has been touting that since operating income has been achieved, every new dollar over that will see 70 cents to the bottom line.  This is an impressive accomplishment for any business model.

The press release also informed us that over 100 million in free cash flow had been achieved for the entire year of 2009, making good on Mel Karmazin’s, CEO of Sirius XM Radio, guidance from the end of 2008.  Upon entering the quarter Sirius XM had 35 million in free cash flow (FCF from here on), which means that Q4 will see at least 65 million in FCF.  FCF is a metric used by investors to gauge a company’s ability to repay debt, make acquisitions, pay dividends, and buy stock back.  Mel Karmazin and Sirius XM realize the importance of this metric, and have been reporting it, and emphasizing its importance to this company.  It’s not hard to shuffle a few things around, and report a profit for one quarter based on earnings.  It’s another to grow FCF quarter in and quarter out, and show continued ability to grow cash on hand or remove debt obligations.  Sirius XM has been doing just this lately.  It removed 2 convertible bonds due in December of 2009 with cash, totaling around 90 million dollars, and paid 59 million dollars on other debt as well.  This payment went to the 10% Senior PIK Secured Notes due 2011. 

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1

Sirius XM Closes at 52 Week High

By
king1
– January 21, 2010
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By Relmor Demitirius

Shares of Sirius XM Radio (Nasdaq:SIRI) traded over its 52 week high close yesterday and closed right at it, .725 cents.  This was up around 9% from its close the previous trading day.  This comes off news from the company that they added 257,000 additional subscribers in the 4th quarter.  The street was expecting much lower.  They also simply confirmed guidance, which is never a bad idea in this economy, before the conference call.  No exact numbers were given, except those in relation to subscribers.

All reported metrics were improvements over Q3 of 2009.  The take rate, which measure how many people become permanent payers to the product from the OEM promo end of the business (car sales basically), was up to 46% from 44%.  This is good news for Sirius XM.  It appears the economic downturn effects on Sirius XM are ending.  Also the churn, what percentage of subscribers who cancel their service per month, when down slighly, to 1.97%. 

They also added around 250,000 self pay subscribers, validating the effects of increasing the take rate, and the lower churn.  These “self pay” subscribers are not counted in the promo subscriber total, and are the “revenue generators” and back bone of the company.  Greg Maffei, CEO of Liberty Media, which owns 40% of Sirius XM from its Liberty Capital tracker (Nasdaq:LCAPA), has raved about this core of loyal subscribers as why he is so bullish the business model of Sirius XM Radio.  Greg Maffei has stated that he expects Sirius XM to be “very profitable”.

This first glimpse at Sirius XM numbers is a good sign that the February Sirius XM conference call will be a good one.  I am expecting a February 4th conference call, but no offical word has yet been given.

Check back on Monday for my quartly earnings estimate for Sirius XM.

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4

Bottom in for Gold

By
Hardeek Patni
– January 20, 2010
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Spot Gold has climbed steadily since 22 December 2009 low of $1075/oz. Gold had declined about $150 since the early December peak at $1225/oz. The decline was due to fear of Dubai debt and profit taking as a correction was due. As mentioned in my previous article, Abu Dhabi stepped into rescue and provided Dubai with a huge $10 bln bailout.

Now moving over to Gold’s technical outlook, little has changed since my last update. My buy zone of 1100-1125 was very decent considering the bottom being $25 away. So now what is the big questionon everyones mind? It is obviously confusing if we look at technical patterns and compare it with seasonal patterns. Technically the current pattern is supposed to be bearish – A sharp dip followed by a fake rally with another down move.

However, seasonal patterns show us the complete opposite. Historically the month of January has been a very sideways month for Gold with February and March being extremely bullish. Considering this pattern to occur again Gold could easily surpass $1200 and challenge $1300 by March.

The seasonal pattern has the bias over technical pattern because fundamentals are more stronger than technicals. Also, after the great performance of Gold last year and gaining popularity as the next bull market, there would be many huge portfolios being adjusted with more weight given to Gold.

Looking at the Chart now, Wave IV met its end at $1075 on 22 December last year. We are now in the early stages of wave V and the rally should be accelerating next week or early February. Those who are in buy from my suggested buy zone should move their stops to 1100 since any move below 1100 could open up the way to the previous all time high of 1030. Another interesting fact here is that the length of wave A) is equal to wave C) which increases the confidence in this count.

Summing up, Gold is bullish above 1100 and we are in the early stages of a massive Wave V. Moving above 1180 would certainly bring momentum back in this market and Gold will shine yet again.

19-1-10 GOLD

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6

Ramblings of a SIRUS XM Radio Lover

By
Andrew Montero
– January 15, 2010
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With the recently announced closure of Worldspace Inc, (OTC: WRSPQ) operations in India and Africa, it is increasingly likely that Liberty’s (NASDAQ:LCAPA, NASDAQ:LINTA) intent is to go after the European market, a market with much more disposable income than India or Africa currently possesses. As written about at Rapid TV News by Chris Forrester, as well as “The Daily News Analysis” website – A Mumbai based Company by Praveena Sharma

Liberty Media has apparently done extensive due diligence on the range of possibilities and no doubt came to the same conclusion many have regarding “Worldspace” and its demise. There is not sufficient disposable income or interest in sufficient numbers in those areas of the world currently to sustain a healthy business model. It seems the speculation would lead to Liberty working on some sort of European and possibly South American/Caribbean Satellite Radio launch with help and expertise from Sirius XM Radio. Perhaps returning to India and Africa after the foundation gets stronger.  

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