Updated from 12:37 p.m. EST to include additional analyst comments in the fourth paragraph and portfolio manager comments in the sixth paragraph.
NEW YORK (TheStreet) - Sirius XM Radio (SIRI) is a battleground stock for several reasons. After years of battling down debt, and seeing the return of a healthy car market, analysts think there is some "serious" upside in Sirius.
CEO Mel Karmazin has been in the top spot at the satellite-radio company for nearly a decade, and has transitioned the firm from one that was heavily reliant on point-of-sales service to being reliant on the new car market.
Karmazin and his team has been regarded as a smart, financially motivated management team, similar to Liberty Capital's John Malone. Liberty owns 40% of Sirius. "It's going to be a free cash flow machine, and I think Sirius will trade at a premium to the market multiple on a free cash flow basis. Paying 15 to 20 times free cash flow for Sirius over the next few years is not a crazy idea," said one hedge fund manager who declined to be named. "It's pretty realistic to think it [Sirius] could see $3 in a short period of time."
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV