Market Overview

Liberty Media Should Outperform

Liberty Media Should Outperform

Liberty Media Should Outperform

With content as king there will be a number of media companies that outperform in the coming months after producing flat results in 2013.  Liberty Media is one of those companies and it has made news during the past week after making a bid for Sirius Radio.

Liberty Media (NASDAQ: LMCA) made an offer to Sirius XM Holdings (SIRI) to exchange 0.076 shares of a new, non-voting, class of Liberty shares for each share of Sirius XM that it does not already own. The exchange ratio would value Sirius XM at $3.68 per share as of the January 3rd.

The stock price moved lower for most of December after it was downgraded by Zacks to Underperform based on its disappointing third quarter of 2013 financial results. Both the top and the bottom line fell below the respective consensus estimate.

The 52-week range for the stock price is $ 105.01  -  $159.33, and it hit a new fresh 52-week high in October. Earnings declined 53% quarter over quarter but the 3-year growth rate of earnings is positive 453%.  Sales increased 621% quarter over quarter and the 3-year growth rate of sales declined 14%.  The profit margin for the company is robust 100% and the company has a very attractive PE ratio of 2.

Recent buying has made this stock relatively attractive. Chairman, CEO John Malone purchased 678K shares on December 23, 2013 for a total of approximately 98 million dollars.  On December 23, 2013 Robert Bennet purchased approximately 724K shares for approximately 105 million dollars.

The technical picture is shows a stock that is forming a bottom after declining for most of the December.  Momentum is strong as the MACD (moving average convergence divergence) index generated a buy signal.  This occurs when the spread (the 12-day moving average minus the 26-day moving average) crossed above the 9-day moving average of the spread. Resistance is seen near the 50-day moving average near 149, while support is seen near the 200-day moving average near 135.  The relative strength index (RSI) an oscillator that measures momentum as well as overbought and oversold levels is printing near 44, which is in the middle of the neutral range and reflects the recent consolidation of the stock price.

The preceding article is from one of our external contributors. It does not represent the opinion of Benzinga and has not been edited.

Posted-In: Markets Trading Ideas


Related Articles (LMCA)

View Comments and Join the Discussion!