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Sirius XM Stock: The $1 Question

As Sirius XM stock again flirts with the $1 mark, many investors wonder if it can break through the threshold again.
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NEW YORK (TheStreet) -- Sirius XM (SIRI) - Get Sirius XM Holdings, Inc. Report stock is hovered just below the $1.00 threshold during Monday's regular trading session after touching a buck earlier Monday morning and briefly clearing $1 on April 9.

As the stock bobs up and down and above and below $1, many investors are left to ponder whether Sirius XM stock will ultimately be able to not only break this threshold, but clear it going forward.

As for Barrington Research equity analyst John Hain, he believes Sirius XM stock will appreciate in value over the next 12 months. Indeed, Barrington Research currently has a $1.25, 12-month price target on Sirius XM stock.

The key drivers for Sirius XM stock and its top line growth, according to Hain, will be rebounding vehicle sales on the back of increasing consumer confidence and a better job outlook, as well as ongoing low interest rates to the benefit of the original equipment manufacturer channel in the upcoming months. Hain notes that seasonally adjusted auto sales fell slightly in February, but spiked in March to their highest levels since the Cash for Clunkers program ended in August 2009.

That said, Hain also believes that while the $1 threshold that everyone's been fixated on is undoubtedly psychologically significant to some degree, particularly with regards to NASDAQ listing standards, it's "really nothing more than another point along the interval scale of market value," Hain wrote in an email to


. "The fact that most investors believe delisting is likely to be avoided, be it by way of

Sirius XM CEO Karmazin successfully appealing to the NASDAQ or by way of a reverse-split, means that the $1 mark needn't be given any additional reverence."

Brent Wilsey of Wilsey Asset Management expressed a slightly different sentiment about the stock. Although Wilsey understands why some would want to buy the stock, given that it's cheap and it's business has been improving, "people are not looking at what the dollar represents," he said. "The business is improving, but it has a long way to go." Wilsey cited Sirius' total debt level of $3.3 billion, versus total equity of $37 million.

Wilsey, who notes that Sirius XM stock currently comprises 0.1% of his portfolio, says that while he wouldn't advise buying Sirius XM stock as a serious, long-term investment, investors "can have fun with it." He warned that excitement over what he deemed a "Vegas" stock could keep pushing it up above $1, which would only encourage a "false sense of security" among investors.

Still, Wilsey wouldn't be surprised if Sirius XM stock ended up staying put at $1 long enough to satisfy Nasdaq's listing requirements, because "it might be a good, surprise earnings season ... as long as the market does well , Sirius will go along for ride."

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In February, Sirius XM stock, which had been trading below a dollar for well over a year, broke through the $1 threshold and managed to stay above it for several days in a row; the stock, however, eventually retreated before those 10 straight business days had passed by. On March 26, Sirius said that the NASDAQ has scheduled a hearing for April 29, at which Sirius XM would be given the opportunity to ask for continued listing on the NASDAQ, pending its re-compliance with NASDAQ's $1 a share rule.

Sirius XM stock ended the trading session down 2.1% at 97 cents. Neither analyst had seen or heard any Sirius-stock driving news on Monday.

-- Reported by Andrea Tse in New York


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