Broadcasting Sirius XM as a Good Short

NEW YORK ( TheStreet) -- There's a saying, "be careful what you wish for; you just might get it."

Back in January, Liberty Media  (LMCA) chairman John Malone offered 0.076 shares of Liberty for each outstanding share of Sirius XM (SIRI) that Liberty didn't already own. With a 53% stake, Liberty currently owns a majority of Sirius.

At the time, Malone's offer valued Sirius' shares at $3.68. Investors argued that it was a "lowball" offer. Investors held out for a sweeter deal. Malone didn't negotiate upward. Instead, he backed out of a deal and is now looking to spin off Liberty into dual tracking stocks to include various entities, such as prior positions in Time Warner Cable (TWC) and Charter Communication (CHTR).

Since all of this unfolded, Sirius stock has been under pressure. Shares closed Friday at $3.20, down 2.4%, and the stock is down 8% year to date. This has happened even though an analyst at Maxim came to the company's defense last Thursday, saying that Sirius' fundamentals remain on track.

Maxim has a buy rating on the stock with a $5.80 price target. From Friday's close, this target suggests a premium of 81%. Jessica Reif Cohen, analyst at Bank of America, also has a buy rating on the stock with a $5 price target. From Friday's closing price of $3.20, this target calls for a 56% premium above current value.

This now brings the total to four analysts who have come to Sirius' defense. Combined, these analysts have an average price target of almost $5 per share. The market doesn't think the stock can get there. So what are these analysts seeing that the rest of the market is not?

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