NEW YORK ( TheStreet ) -- With today's earnings, 22 million Sirius ( SIRI) perma-bull shareholders finally received what they anxiously awaited for. First quarter was a dream quarter for investors that should have shareholders dancing in the street singing praises for CEO Mel Karmazin.The top line revenue increased more than 11% year-over-year resulting in more than $804 million in the first three months of the year. $804 million may not be a relatively big beat compared to the mean estimate of $803, but Mel Karmazin has done a remarkable job navigating through the challenges to bring home another winner quarter. Monthly churn has dropped to 1.9% and even auto sales are now cooperating to bring the total subscribers up to a record 22.3 million. Net income is up almost 40% meeting Wall Street's expectations of $0.02 per share. Chris Ciaccia wrote an interesting
I picked Intel ( INTC) and Apple ( AAPL) as comparisons because they both sell to consumers and are well known brands that have recently reported earnings. I included Ford because the company builds vehicles and auto sales are a big influence in the performance in Sirius. It is hard to find an article anywhere about the prospects of Sirius without referencing the auto industry. I believe there is a point to be made that if you want exposure to the auto industry, buying General Motors ( GM) or Ford ( F) makes as much or more sense than buying Sirius. There are many similarities between Sirius and part suppliers for auto makers. At the same time, it costs 1/3 less to buy earnings from Ford than it does with Sirius. If you're going to hold the shares either way, why not look at hedging your position with options? Absent Sirius reporting greater income than expected, there is little reason to believe the shares will significantly appreciate in price (other than a possible buyout). Even so, a stock in a range can make money for shareholders with the use of options. A last note to the Sirius "perma-bulls", you may have dug your heels in with a lifelong purchase of Sirius stock like so many others, however it doesn't mean you can't profit even with the share price basically flat lined. By selling covered call options, you have a hedged position lowering risk and paying you each day in the form of time decay. The December 2012 $2.50 strike options can be sold for about 20 cents per share. If in December the shares have moved higher you can simply buy back the options before expiration and roll over to a higher strike price. If not, you can allow them to expire, rinse and repeat.