Analyst Says Buy Sirius (SIRI), Liberty Media (LMCA) or Both

December 7, 2012 10:18 AM EST
Get Alerts SIRI Hot Sheet
Price: $4.63 +0.87%

Rating Summary:
    15 Buy, 9 Hold, 0 Sell

Rating Trend: Up Up

Today's Overall Ratings:
    Up: 19 | Down: 19 | New: 13
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Yesterday morning, Sirius XM Radio (NASDAQ: SIRI) pleased investors when it announced a buyback of $2 billion in common stock and a 5 cent one-time special cash dividend. Liberty Media (NASDAQ: LMCA) owns 49.8 percent of SIRI and has "effective control", influencing shareholder friendly decisions, in the view of analysts at Maxim Group.

"We continue to recommend purchasing shares of SIRI as a pure play," said analyst John Tinker, noting the company's combination of growth, along with a healthy share buyback program.

Inventors have two ways to buy Sirius XM Radio. They can simply purchase the stock, or they can buy shares of Liberty Media. In doing so, investors are paying $2.11 for SIRI, noted Tinker.

"We continue to recommend that investors buy LMCA," said Tinker. "With Starz spun out [pending], SIRI becomes a bigger percentage of LMCA (~62% from the current ~58%) and a purer play. LMCA currently owns 49.8% of SIRI and is expected to move to take control (going over 50%) once it receives permission from FCC."

Maxim Group maintained a Buy rating on Sirius XM Radio (NASDAQ: SIRI) with a price target of $3.80.

Maxim Group maintained a Buy rating on Liberty Media (Nasdaq: LMCA) with a price target of $155.

For an analyst ratings summary and ratings history on Sirius XM Radio click here. For more ratings news on Sirius XM Radio click here.

Shares of Sirius XM Radio closed at $2.79 yesterday.

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