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I would avoid SIRI because I am unable to project a time when it will be profitable as a stand-alone entity. I took the past 5 quarters of income statements, put them into a spreadsheet, and used Excel's Forecast Function to fill in the next three quarters. The company never shows a profit, and losses continue more or less at the same level as Q4 2007.
The primary driver is a slowdown in Subscriber Revenue growth, quarter to quarter, which goes like this...14.1%, 9.9%, 8.2%, 0.4%...growth is hitting the wall, fatal to what has been an exponential growth story. There is no way the decreasing growth trend can support a price/sales ratio of 4.8.
That leave the investor dependent on the merger with XMSR, which seems a long-shot due to the need for regulatory approval and the fact it would end competition in satellite radio. Many media type stocks can be sustained indefinitely by the possibility of merger/acquisition at premium prices, but that not something I would bank on here.
Tom
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Comments (6)
Tom,
Are you "Serious" ?
The Non-Commercial Pay Radio Business Model is for Good Times when the Money & the Living is Easy. It is a non-essential Luxury. The Gas Money comes First. Not So ??
My answer to Sirius is this --- I buy & BURN my own CD's. I keep the originals @ home and the copies in the CAR. I get to listen to my choice of music in a program "MIX" that I pre-determine. If I scratch a Copy or Warp it in the Hot Sun of a summer's day -- NO big deal. Replacement costs are far LESS than a subscription FEE.
Besides, I can always fall back on AM/FM over the FREE airwaves.
Sirius is in SERIOUS trouble vis a vis me.
RoiRRawGnIkIV ( fka ( formerly known as ) VikingWarrior )
PS : I get all the NEWS I need on the WEATHER Report - Bob Dylan
The Conspicuous Consumption Status-Seeking FAD is OVER, Vance Packard ( who wrote a book titled "The Status Seekers" ).
Posted by don ferk | February 29, 2008 1:23 PM
SIRIUS; ARE YOU KIDDING. TIME WASTED ON SIRIUS COULD HAVE BEEN USED TO INVESTIGATE THE BEST SECTORS AND THE BEST MOVES IN 07 COULD HAVE GAINED YOU 50-70%. SECTOR MOVEMENT ONE OF THE MOST OMPORTANT THINGS A GOOD INVESTOR SHOULD SPEND TIME ON. I INVESTGATE THE SECTORS AT LEAST TWICE WEEKLY AND HAVE HAFD AT LEAST 80% GAINERS. STOP WASTING TIME WATCHING A MERGER THAT MAY OR MAY NOT HAPPEN AND MOVE INTO 2008!!!!
Posted by Gary Thurner | February 29, 2008 5:06 PM
Don
sorry to have to correct ya man, but you musta dyslexed: Dylan- Subterranean Homesick Blues- you don't need a weatherman to know which way the wind blows; Simon and Garfunkel- The Only Living Boy in New York - I get all the news I need on the weather report... lol ... its cool.. hard to keep all those old lyrics and artists sorted
gary
with all those caps I guess we all know how wonderful a stock picker you are now, but maybe some of us also are interested to know the fundamentals of companies that may just offer good short sales too, especially in this recessionary economy with a fiat currency thats bound to head lower with a Fed and government bent on sending the dollar to the scrap heap of time, an economy dependent on way over-debited consumers that just might be seeing the end of all that good-time spending soon enough, and a bipolar market that really seems clueless day to day ... so ok gary, I'm willing to hear about those companies that can buck the trend in a bear market, but still am glad to to know that Tom and others are doing due dillegence on the downside of some of those good-time plays that are so bound to hit the skids... meanwhile, I'm keeping focused on precious metals, stocks that will benefit from peak oil - including alternative energies, clean coal burning, oil service companies, uranium, useful greenhouse plays (i'm sure there is still money to be made in ethanol plays for the savy, but what an extrordinary boondogle, used by the politicians to sucker the gullible American public in a time when energy demands are growing so fast and natural resources of all types are hitting peaks all over the map- thank you stupid government and over zealous greens- all we get from ethanol is wasted farmlands, higher taxes, more overburdened water resources at time when water is already short, and most definitely, way higher food costs-oh yea, failed to mention those damaged engine seals - looking here at cellulose ehtanol plays as a far more efficient way to go on that front )
Anyway thanks again Tom ... at least this reader is glad to hear about any ideas that might be useful in what looks like pretty rough seas ahead
Posted by | March 1, 2008 3:11 PM
I'm new here so I'm not sure if my ID was automatically attached to my post just now because I don't see it with the post, but if not, that last post came from handi51...thanks
Posted by handi51 | March 1, 2008 3:16 PM
Who was that " Masked Man" , Tonto ?
Is handi51 one CARD short of a FULL Deck ?
I'm a Card --- the 53rd CARD - the Joker.
I'm a Joker, a toker, a midnight SMOKERE - I get my Loving on the 'RUN', Steve Miller.
Handy-Man - you 'date' yourselve ( but at least
you are 'dating' within your own species).
I can't find ANY handi51 in the SLO-2 Blog Directory.
Actually, I'm NOT dyslexic but I am an Active Autistic High-Functioning Asperger - A self-confessed Robert Heinlein " Stranger in a STRANGE Land ".
Maybe I waw thinking about a Mid-70's Jazz Group called Weather Report - Joe Zaninul, Wayne SHORTer & the FAB BASSist Jaco Pastonus -
They didn't have ANY words --
They did do some " Tale Spinnin' " in the " Black Market " and they had a " ForeCast : Tomorrrow " for " Heavy Weather ".
Check it out -
I do have a FLAIR ( & Flare ) for AnaGrams & Pallindromes -- sometimes CONfuZed with Dyslexia ( or was that DISS - Lexicon - Ya? )
Is your 1st name Mark, which is from the Latin meaning WARlike ?
Don Lee Ferk ( aka RoiRRawGnIkIV fka [ formerly known as ] VikingWarrior )
PS : Just "Hackin' On Ya. No harm meant - no offense taken. OKAY !!
I was the SLO-1 [UnOFFicial] "Wild Man" & got the "MISS" Congeniality CONsoLATion ( BOOBY ) Prize.
All of the Above is just me being Me.
It's a TUFF & Lousy JOB, but SomeBuddy's gotta DO IT.
S&G 'STOLE' the line from Dylan who was referring to the Militant Arm of the Students for a Democratic Society ( aka SDS ) who went around BOMBing stuff. Maybe they are Ba-a-a-ack - attacking the Marquette O'StoQUES.
Maybe I should SELL SDS short - an fuhgeddabowt SIRI ........
Posted by don ferk | March 3, 2008 9:21 PM
Tom,
Did you happen to catch Bill Fleckenstein's March 3, 2008 Column ?
To Wit :
http://articles.moneycentral.msn.com/Investing/ContrarianChronicles/AGreatPretenderOfARally.aspx
http://articles.moneycentral.msn.com/Investing/ContrarianChronicles/AGreatPretenderOfARally.aspx
Fleck underSCORED the Market's notion that Insured Bonds automatically 'GET' the Rating
assigned to the Bond's Insurer - irRegardless of the underLying credit qualityy of the Issuing Entity.
DownGrades of Insurers are to be avoided at ALL costs --- They De-stabilize the Market
& lead to a lot of PAIN for the erstwhile "INNOCENTS". Not. So ?
It's kind of like the "NOTion" of 'Too BIG to FAIL'.
I like Bill's 1st 2 paraGRAPHS :
Over the last couple of weeks, the stock-market action has been remarkable. The bulls have enjoyed a nice rally.
It was precipitated by the anticipation that the monoline insurers would be bailed out. Then anticipation turned into reality:
The bailout was nothing more than an agreement by the ratings agencies to pretend that the monolines were still worthy
of AAA ratings.
Parenthetically, I would just note that the rating agencies continue to be a farce. How could MBIA (MBI, news, msgs) --
which recently had to pay 14% to borrow money, and whose debt still yields over 13.5% -- ever possibly be considered AAA?
If the ratings agencies are to have one shred of credibility again, ever, they might as well start now.
But of course, just like every other aspect of the sanity that some of us might like to see break out,
it seems to be politically unacceptable for anyone in a position of real responsibility to act like an honest adult.
I also liked Fleck's pointing out the long-standing 800-Pound Gorilla in the room.
"MANAGED CAPITALISM", which is neither Fish nor Fowl.
Capitalists pray for socialism
.In any case, the determination to suppress the destructive downside of capitalism and ensure permanent prosperity is a terrible idea that will not work.
Permanent prosperity, after all, is what socialism was supposed to be about, and we've all learned that theory doesn't work.
I continue to find it a sad irony that Wall Street -- the alleged bastion of capitalism -- would cling so dearly to the hope of socialism.
That's exactly what the Fed is all about. Its central planners think they can pick the right interest rate with which to run the world,
even as the evidence indicates that their efforts over the last 20 years have produced two epic bubbles.
This story would strike any sane person as the stuff of nightmare. Sadly, it's our waking reality.
Benjamin Franklin said it best, " if you barter "SECURITY" for FREEdom - You will have neither".
( maybe that's a slight MisQuote - I'm DysLexic now - or haven't you Heard ? )
Don
Songs O'da DAY
Bob Dylan - Subterranean HomeSICK Blues
" You don't NEED a Weather Man to know which way the WIND blows '
http://youtube.com/watch?v=2-xIulyVsG8
http://youtube.com/watch?v=2-xIulyVsG8
&
(Paul) Simon & ( Art) Garfunkle
" The ONLY Living BOY in New York "
' I get the news I need from the Weather Report '
http://youtube.com/watch?v=-IwYQ1Vqf_4
http://youtube.com/watch?v=-IwYQ1Vqf_4
PS : The SDS militant group was called "The Weather Men".
Posted by don ferk | March 3, 2008 10:00 PM