Barron's Recap: Underestimating Sirius XM
This weekend in Barron's online: a look at Sirius XM, the prospects for retailers this holiday shopping season, a small bank merger, Qualcomm ages gracefully and more.
"Sound of Success" by Alexander Eule.
Though Sirius XM (NASDAQ: SIRI) has a monopoly on satellite radio, a growing subscriber base and loads of free cash, investors are underestimating the satellite radio provider's potential, Barron's argues in this week's cover story.
Sirius is adding subscribers at a formidable clip, while satellite TV companies struggle to maintain them. Programming costs are down, and last month Sirius launched its 10th satellite. Content such as Major League Baseball games and Fox News are locked down through the end of the decade. "[M]ore institutional people are thinking about this company as a viable holding," one expert is quoted as saying. "From a fundamental perspective, there are a lot of reasons to like it."
The article outlines the company's volatile past, from its merger to become a monopoly to its near bankruptcy and bailout by Liberty Media (NASDAQ: LMCA). See how the recovery of the auto industry has been a major boon to Sirius' business. Also see what its main challenges are, and why the stock could rise 50 percent nonetheless.
The article includes a detailed comparison to pay-TV and other rivals in terms of subscribers, share price, revenue and free cash flow, as well as chart showing the fall and rise of the share price since 2008.
See also: Buy Intel And Profit From Market Fear
"Shopping for Discounts on Main and Wall" by Jacqueline Doherty suggests that holiday spending is poised to rise. See why lagging U.S. retailers such as Home Depot (NYSE: HD), Macy's (NYSE: M) and Kohl's (NYSE: KSS) could benefit.
David Englander's "Bank Merger Looks Good" takes a closer look at the deal between Rockville Bancorp (NASDAQ: RCKB) and United Financial Bancorp (NYSE: GBX), just the latest in a trend toward consolidation of community banks.
In "A Technology Giant Ages Gracefully," Reshma Kapadia makes the case that Qualcomm (NASDAQ: QCOM) may be having a sort of midlife crisis as it matures with the cellphone market, but the wireless chip maker is not about to embarrass itself or investors.
With stocks getting pricey, it may be time to consider locking in gains of U.S. shares, especially small caps. See "Time to Prune Your Stock Portfolio" by Jack Hough to discover why investors should hang on to Europe and emerging markets.
"In Bankers' Stead" by Erin E. Arvedlund is a profile of Philip Weingord, founder of Seer Capital Management. Weingord shares how he made money in J.C. Penney (NYSE: JCP) and Fannie Mae, and why he is not a fan of Sallie Mae.
In Robert Milburn's Penta article, "The Sweet Smell of Euro Trash," the case is made for why Europe's nonperforming loans should offer returns in the mid-to-high teens over the next three to five years. It is a way to play Europe as the hot equity play of 2014.
Cliff Corso, CEO of Cutwater Asset Management, is interviewed in "How to Play Stocks and Bonds as Rates Move Up" by Lawrence C. Strauss. See why Corso expects another good year for equities, and why he likes fixed-income plays in munis and certain high-yield bonds.
Steve Garmhausen's "The Power of Concentration" offers best advice from independent advisor Richard Burridge, who sees much to like in Japan. See why Burridge allocates as much as 15 percent of his equities portfolios to the Asian nation.
"Now Comes the Hard Part" is an editorial commentary by Thomas G. Donlan in which he claims that the Affordable Care Act is anything but affordable.
Columns in this weekend's Barron's discuss:
- Allowing passengers to make cellphone calls on planes
- Investors drinking from the Fed's easy money punchbowl
- A big, dispassionate bet on Europe's recovery
- Why ignoring growth-oriented ETFs is a mistake
- Intel's (NASDAQ: INTC) new CEO wants big changes
- A new visual trading platform from the creator of thinkorswim
- President Obama and the mortgage market mess
- Last week's dividend hikes
- Cinemizer goggles for smartphone movies
- The Food Stamp program and nutrition
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