TLDR:
- Sirius XM (SIRI) stock jumped 8.24% after Berkshire Hathaway increased its stake to 32%.
- Berkshire purchased 3.6 million additional SIRI shares.
- SIRI’s P/E ratio of 8.18 is near its 10-year low, with a dividend yield of 3.95%.
- The company faces financial challenges, including a high liabilities-to-assets ratio.
- Sirius XM recently became an independent public company after closing a transaction with Liberty Media.
Sirius XM Holdings Inc. (SIRI) experienced a significant boost in its stock price on Tuesday, October 15, 2024, as shares climbed 8.24% following news of Berkshire Hathaway’s increased investment in the company.
The surge came after Warren Buffett’s investment firm disclosed the purchase of an additional 3.6 million shares, bringing its total stake in the satellite radio operator to 32%.
The stock, which closed at $26.985, has been trading near its 52-week low of $22.18. This recent movement has caught the attention of investors, particularly given the company’s current Price-to-Earnings (P/E) ratio of 8.18, which is close to its 10-year low. Sirius XM’s dividend yield stands at an attractive 3.95%, approaching a 10-year high.

Berkshire Hathaway’s investment comes at a time when Sirius XM is facing both opportunities and challenges. The company recently completed a transaction with Liberty Media, emerging as an independent public company.
CEO Jennifer Witz expressed optimism about this new phase, stating,
“Today SiriusXM embarks on a new chapter as an independent public company, building on our leading position in audio entertainment.”
Sirius XM is not without its financial concerns. The company’s Altman Z-Score of 1.35 suggests potential bankruptcy risk within the next two years, and its balance sheet reveals a high liabilities-to-assets ratio, indicating significant leverage. These factors have contributed to the stock’s 51% year-to-date decline and 44% drop from a year ago.
Despite these challenges, Sirius XM maintains some positive attributes. The company boasts a high Piotroski F-Score of 8, suggesting strong financial fundamentals. Furthermore, its current valuation may present an opportunity for investors, as indicated by the company’s GF Value.
In its most recent financial report, Sirius XM disclosed a loss of 100,000 self-pay subscribers in its satellite radio unit during the second quarter. This represents an improvement from the 130,000 subscriber loss recorded in the same period last year. The company attributed this progress primarily to a reduction in voluntary churn.
CFO Tom Barry outlined the company’s strategy moving forward, stating, “Our primary objectives are to continue to invest in our Subscription business through enhanced consumer experiences, expand advertising opportunities, and deliver healthy margins and robust cash flow.”
Berkshire Hathaway’s increased investment in Sirius XM follows the completion of Liberty Media’s deal to combine its tracking stock with the rest of the audio entertainment company. This move was part of a larger reshuffling of John Malone’s media empire, which also included the spin-off of the Atlanta Braves baseball team into a separate publicly traded company.
The market’s reaction to Berkshire Hathaway’s investment highlights the influence that Warren Buffett’s moves continue to have on investor sentiment.
Known for his value investing strategy, Buffett’s increased stake in Sirius XM may signal confidence in the company’s long-term prospects despite its current challenges.
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