Sirius XM Holdings (SIRI, Financial) experienced a substantial 8.24% surge in its stock price following the news that Berkshire Hathaway has increased its stake in the company. This enthusiasm among investors has pushed the stock to a current price of $26.985.
Since October, Berkshire Hathaway has acquired an additional 3.6 million shares, bringing its total ownership to 108.7 million shares, which accounts for 32% of Sirius XM's outstanding shares. This significant investment by Berkshire Hathaway highlights its confidence in Sirius XM's potential, despite the company experiencing a 49.58% decline in stock price year-to-date and a 42.65% drop over the past 52 weeks.
Sirius XM Holdings (SIRI, Financial) is currently exhibiting mixed financial indicators. On the positive side, the stock has a competitive PE ratio of 8.18, which is close to its 10-year low, suggesting that the stock could be undervalued. Additionally, the company's dividend yield is near a decade high, providing an attractive income stream for investors. The strong Piotroski F-Score of 8 further indicates a robust financial situation.
However, several concerns remain. The company's financial strength is marked as poor due to a high debt load, reflected in a distress-level Altman Z-Score of 1.35, which indicates potential bankruptcy risk. Moreover, Sirius XM's operating margin has been declining at an average rate of 3.5% per year over the past five years.
The GF Value for Sirius XM Holdings is estimated at $54.25, which you can check out here. This value suggests the stock may be undervalued, however, GuruFocus has flagged it as a "Possible Value Trap." Therefore, investors should assess both the opportunities and risks before making investment decisions.
With a market capitalization of $9.15 billion and a dividend yield of 3.95%, Sirius XM Holdings (SIRI, Financial) continues to be a company of interest. The high level of institutional ownership, particularly by notable investors like Berkshire Hathaway, lends a degree of credibility and stability to potential investors.
