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TheStreet Open House

5 Stocks to Watch Under $5

Stocks in this article: SIRI ZQK CRIS IMMU NM

NEW YORK ( TheStreet) -- Analysts expect these stocks to outperform the broader markets. These under $5 stocks have upside potential of 25.7% to 87.6% with a mean value of 45.6% and average buy rating of 81%.

These stocks are listed in ascending order of upside potential.


5. Sirius XM Radio (SIRI - Get Report) is a satellite radio service offering music, sports, news, talk, entertainment, traffic and weather channels in the U.S. on a subscription basis. Certain of the company's music and other channels are available over the Internet and through applications for Apple, Blackberry and Android-powered smartphones. The company distributes satellite radios through automakers (OEMs), retail locations and its Websites.

Of the 12 analysts covering the stock, 75% recommend a buy and 17% suggest a hold. The stock's average 12-month price target is $2.28, which is 25.7% higher than the current price, according to a Bloomberg consensus.

For the 2011 third quarter, Sirius recorded revenue of $763 million, up 6% from $718 million during the 2010 quarter. Adjusted EBITDA rose 16% to $197 million, vs. $170 million during the third quarter of 2010. Subscriptions swelled 7% year-over-year to 21.3 million as of Sep. 2011. During the quarter, self-pay net additions and the self-pay subscriber base increased 41% and 7% to 0.4 million and 17.5 million, year-over- year. Cash and cash equivalents at the end of the quarter amounted to $600 million. Net debt to adjusted EBITDA declined to 3.4x from 4.5x in the 2010 third quarter.

The company has reiterated its full year 2011 guidance and expects net subscriber additions of 1.6 million, while revenue is expected to surpass $3 billion. Adjusted EBITDA is seen at $715 million. For full year 2012, the company expects revenue growth of 10% to $3.3 billion year-over-year. Adjusted EBITDA is expected to grow 20% to ~$860 million, while free cash flow is seen up 75% at $700 million.

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