The model upgraded satellite radio broadcaster Sirius XM Radio to "hold."
Quarter: Sirius swung to a first-quarter profit of $42 million, or 1 cent, from a loss of $50 million, or 7 cents, a year earlier. Revenue grew 13%. The operating margin rose from 7.1% to 19%. Sirius has $3.6 billion of debt, equal to a debt-to-equity ratio of 24.
Stock: Sirius has nearly doubled during the past year, outpacing U.S. indices. It trades at a price-to-projected-earnings ratio of 75 and a price-to-book ratio of 29, 320% and 815% premiums to peer averages. It's cheap based on sales and cash flow.Consensus: Of firms rating Sirius, 5, or 56%, advise purchasing its shares and four recommend holding them. Janco Partners expects the stock to gain 35% to $1.40. Lazard Capital Markets believes it will hit $1.35. RBC (RY) thinks it's fairly valued at $1. The model upgraded utility FPL Group to "buy." Quarter: First-quarter profit soared 53% to $556 million, or $1.36, as revenue declined 2.3%. The operating margin expanded from 16% to 26%. The balance sheet holds $1.2 billion of cash and $21 billion of debt, equal to a debt-to-equity ratio of 1.5. Stock: FPL has fallen 9.3% during the past year, underperforming U.S. indices. It trades at a price-to-projected-earnings ratio of 11 and a price-to-cash-flow ratio of 4.9, 11% and 8% discounts to peer averages. The shares offer a 3.9% dividend yield. Consensus: Of analysts covering FPL, 13, or 54%, advise purchasing its shares and 11 recommend holding them. JPMorgan (JPM) predicts that the stock will rise 19% to $61. Barclays (BCS) expects it to climb 15% to $59. It has fallen 7%, annually, since 2007.
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