Why It's Time to Sell Sirius and Pandora

NEW YORK ( TheStreet) -- In order to survive in the investing world, and on Wall Street in particular, sometimes it becomes necessary to contradict yourself -- or at least have certain offsetting viewpoints.

The reality is, if you are an investor and you are not mired in a state of perpetual worry, then you are probably not paying attention.

"Conviction" is overrated. This seems to be the case for Pandora Media ( P) and Sirius XM ( SIRI) as they appear to be stuck in the constant dance of one step forward and two steps back.

For as well as Pandora has performed of late, it seems inevitable that tech giant Apple ( AAPL) is poised to take over its territory. Apple has yet to make a formal announcement about its streaming aspirations and the rumor alone was enough to send Pandora investors running for cover.

It is premature to say that Pandora would not be able to coexist with Apple if it indeed decides to pursue streaming, but when have we known Apple to be pleased with second place?

Apple is not new to music. What's more, the ease with which its existing mobile devices such as iPods, iPads and iPhones can integrate with IP and within the automobile will render Pandora irrelevant in the manner that CDs have become archaic. People will be able to stream their existing songs on to various platforms all from their existing storage on iCloud.

What will then be left for Pandora besides becoming an attractive acquisition target? I can see Google ( GOOG) or Microsoft ( MSFT) becoming interested, but will they be willing to pay more than what the stock is currently worth?

As much as I enjoy listening to Pandora, it is hard to see that the company will have a sustainable future if/when Apple decides it wants its business. I think the stock is a sell.

For similar reasons, I have become somewhat concerned about the prospects of Sirius XM ( SIRI). However, Sirius' biggest fear at the moment has only to do with the challenge it faces against Liberty Media ( LMCA) who wants nothing more than to take over the company.

Last week Liberty converted almost 50% of its preferred shares of Sirius to common and in so doing it was able to increase its Sirius stake to 49.5 percent while also owning roughly 32 percent of common shares.

Though it remains unclear what this will mean for investors, it does signal that the stock will likely not appreciate from current levels. So the question is what is the benefit of holding at this point?

Just ahead of Liberty's conversion, Gabelli & Co. last week downgraded Sirius to sell. They have become aware that the stock rose artificially as Liberty was buying shares on the open market as it increased its holdings from 40%.

If I were a Sirius or Pandora investor, I would try to embrace the idea that hope no longer serves as a sound investment premise.

As well as both companies have performed so far on the year, I think it would be wise to be sellers of both stocks and seek shelter in other companies with less murky outlooks. Both stocks may start to see a downtrend as a result of what might be around the corner -- from Apple and Liberty.

At the time of publication, the author was long AAPL and no position in any of the other stocks mentioned.

This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.
Richard Saintvilus is a private investor with an information technology and engineering background and has been investing and trading for over 15 years. He employs conservative strategies in assessing equities and appraising value while minimizing downside risk. His decisions are based in part on management, growth prospects, return on equity and price-to-earnings as well as macroeconomic factors. He is an investor who seeks opportunities whether on the long or short side and believes in changing positions as information changes.