This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Sirius Could Splash Its Cash

NEW YORK ( TheStreet) -- Sirius XM (SIRI - Get Report) reports first-quarter earnings early on Tuesday, and now that the company is profitable, investors are wondering whether CEO Mel Karmazin and his team will start giving back some of its hard-earned cash.

After the company's first price hike in its history earlier this year, as well as lower operating expenses, Sirius may have approximately $3 billion in free-cash-flow over the next few years, according to Maxim Group analyst John Tinker in a research report. But how it gets distributed is up in the air due to Liberty Media's ownership stake.

Once thought to be near bankruptcy following the merger with XM Satellite Radio and several high-priced talent acquisitions like Howard Stern, Oprah Winfrey, Martha Stewart and others, Karmazin and his team have cut debt, and free-cash-flow is expected to rise 73% year-over-year to $719 million, noted Maxim Group's Tinker.

Tinker believes Sirius will update investors on returning capital to shareholders, paying down debt or acquisitions, but "would not be surprised if Sirius downplayed the timing of the buyback as they may not want to help Liberty Media (LMCA - Get Report) increase its 40% holding without paying up." He rates Sirius shares "buy" with a $3.20 price target.

John Malone and Liberty Media own 40% of Sirius after Malone's Liberty Media loaned Sirius $530 million in 2009 to essentially bail out the company.

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
F $15.77 0.00%
GM $35.59 0.00%
LMCA $39.40 0.00%
SIRI $3.96 0.00%
AAPL $130.28 0.00%


DOW 18,080.14 +21.45 0.12%
S&P 500 2,117.69 +4.76 0.23%
NASDAQ 5,092.0850 +36.0220 0.71%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs