Sirius XM (SIRI) Will Still Benefit From Lower Auto Sales

Posted 02 Sep 2010 — by Brian "Newman" Rayl
Category Sirius XM (SIRI) News

By Brian “Newman” Rayl

auto salesYesterday, September 1st, the auto industry released sales numbers for the month of August. According to Edmunds Auto Observer, the seasonally adjusted annualized rate (SAAR) came in at 11.5 million with 997,001 new vehicles sold for the month nationwide, down a staggering 21% year-over-year from August 2009. For Satellite Radio provider Sirius XM Radio (NASDAQ: SIRI), anything above 900,000 vehicles sold on a monthly basis will allow them to add subscribers or, at a minimum, break even.

Year-over-year comparisons for auto sales in August were ugly. Back in August 2009 the economy was in dire straits and the government decided to take action by initiating the “Cash For Clunkers” program, which allowed people to trade in older, less fuel-efficient vehicles for new fuel efficient vehicles. This stimulus program worked wonderfully. In July 2009 the SAAR was less than 11.3 million. Cash For Clunkers boosted the SAAR to just under 14.2 million for August 2009. Automakers are dismissing the year-over-year comparisons, saying that cash for clunkers was only a temporary boost to the numbers because of government incentives and did not reflect the reality of the auto market at the time. Once the Cash for Clunkers incentives expired, auto sales numbers quickly dropped. September 2009 followed with a 9.4 million SAAR and October 2009 finished with a SAAR of 10.4 million. Amid August’s muted auto sales, some sources are hinting that further government stimulus may be considered.

Taking the biggest hit of the car manufacturers was Toyota (NYSE: TM), falling a staggering 34% from a year ago comparisons while still battling image problems following recalls due to brake issues. Toyota was closely followed by Honda, which dropped 33% and Nissan which slid 27% from year ago sales. The American manufacturers fared a little bit better. Ford (NYSE: F) took an 11% hit, while GM (which recently announced its IPO), took a 25% hit year-over-year. Out of the “Big 6″ car manufacturers the lone standout in these numbers is Chrysler, who was not able to fully benefit from Cash for Clunkers due to their bankruptcy proceedings and factory shutdowns. Chrysler showed an increase in car sales year-over-year of 7%. Read More

Maxim Group Senior Media Analyst John Tinker To Weigh In On Sirius XM (SIRI) — Tonight At 8:00PM ET

Posted 01 Sep 2010 — by Demian Russian
Category Sirius XM (SIRI) News

by Demian Russian

Maxim GroupMaxim Group Senior Media Analyst John Tinker will weigh in on Sirius XM Radio (NASDAQ: SIRI) in an exclusive, live interview on Playground Radio tonight, September 1st, at 8:00PM Eastern. Mr. Tinker recently initiated coverage of Sirius XM for Maxim Group with a BUY rating and a $1.40 price target.

“It’s dollar price may be masking an oligopolistic quality of fundamentals that should attract a broader following.”

– John Tinker, Maxim Group Senior Media Analyst

In his August 18th initiation report, Mr. Tinker laid out a compelling case for the attractiveness of Sirius XM’s current valuation. He compared Sirius XM’s EBITDA growth rate to traditional media companies and compared Sirius XM’s EV to EBITDA multiple to Netflix (NASDAQ: NFLX) to show Sirius XM’s current discounted multiple. By 2012, he sees FCF approaching $0.10 and even “some kind of share buyback as possible.” Tinker believes that Sirius XM’s quality franchise and growth prospects, combined with its financial and operating leverage, “suggests that a higher premium is justified.”

John Tinker, Maxim Group Senior Media Analyst
Mr. Tinker has worked extensively in the media business as an equity analyst, private equity investor and fund manager. Prior to joining Maxim, he managed Steamer Capital, an investment firm. From 1996-1998, he was Managing Director at Sandler Media’s private equity fund. Previously, Mr. Tinker was the media/internet/entertainment analyst at ThinkPanmure, where he was the only analyst to recommend Google at its IPO price. In the 1990′s he co-founded Montgomery Securities (now Bank of America) media & communications division after stints at Furman Selz and Morgan Stanley. He graduated from Exeter College, Oxford University with an M.A. in Politics, Philosophy and Economics.

Tonight’s Playground Radio program will be hosted by Demian Russian, with Dennis “Cos” Costa and Brian “Newman” Rayl. After tonight’s interview with Mr. Tinker, a discussion about the latest happenings in the world of Satellite Radio will follow. Listeners are welcome to call in and join the live discussion at (347) 934-0239. Playground Radio can be heard live Wednesdays at 8:00PM Eastern. Read More

Onkyo Unveils New THX-Certified, Sirius-Ready Home Theater Receiver

Posted 31 Aug 2010 — by Demian Russian
Category Sirius XM (SIRI) News

Onkyo PR-SC5508

By Demian Russian

Expanding its product line to include upscale separate components, Onkyo unveiled three new THX-Certified components yesterday. The new Onkyo PR-SC5508 is Sirius (NASDAQ: SIRI) ready, and it’s also the company’s first A/V preamplifier/processor that is both 3D-Ready and THX-Certified. The PR-SC5508 is designed to be paired with the new Onkyo PA-MC5500, a nine-channel THX-Ultra2 Plus certified analog power amplifier that is 8-ohm rated at 150 Watts per channel, and up to 400 Watts dynamic power into 3 ohms. Onkyo also announced the matching BD-SP808, a THX Certified and DLNA 1.5 Certified BD Live Blu-ray Disc Player with Marvel Qdeo video scaler.

“Sixteen years ago, Onkyo created a revolution in home theater with its introduction of the world’s first THX Certified AV receiver, the TX-SV919THX. Onkyo’s engineers have worked closely with THX to maximize the home theater experience for consumers. Now we are introducing a trio of high-end component separates. Their build-quality, market-leading features, and THX-Certified performance will ensure that Onkyo will quickly become a major factor in this higher realm of the AV marketplace.”

– Paul Wasek, Onkyo’s marketing manager

Onkyo’s new PR-SC5508 A/V preamplifier/processor is a THX-Ultra 2 Plus certified, network-capable, 9.2-channel audio-video controller. Networking features of the PR-SC5508 include DLNA 1.5 and Windows 7 compatible connection to PC audio and internet radio. The system comes configured for Sirius, Slacker, Pandora, Rhapsody, Mediafly, Napster, and VTuner Internet Radio. The PR-SC5508 is a THX-Ultra 2 Plus certified system offering surround sound, height channels, setup calibration, and state of the art processing from Dolby, THX, DTS, and Audyssey, including their new MultEQ XT 32. The PR-SC5508 connectivity options include: 8 HDMI inputs, dual USB’s, two balanced line-level XLR audio inputs, and nine XLR preamp outputs to drive the matching PA-MC5500 nine-channel power amplifier. Read More

Patent Reveals Sirius XM’s (SIRI) Satellite Radio 2.0 Possibilities

Posted 27 Aug 2010 — by Brian "Newman" Rayl
Category Sirius XM (SIRI) News

By Brian “Newman” Rayl

Sirius XM Satellite Radio 2.0 A few days ago, my partner Dennis “Cos” Costa and I wrote an article speculating on the possibilities of a Slacker/Pandora type application for Sirius XM (NASDAQ:SIRI) and how it would benefit the company to create such a service or buy out one of the existing services. One of the key issues that we determined was in this paragraph:

“We also both agreed that Slacker and Pandora are feature rich with a very nice “jukebox” feel to it, allowing you to customize your very own personal radio stations, while providing users with some music discovery advantages at the same time. You can base your station on a certain group or a certain theme, as well as creating a ”hate songs” list so that they never play again. The personalization of these services is quite nice. Obviously you cannot do the this with Sirius XM, leaving the user only able to pick a genre of music, but not the artist.”

Should Sirius XM (SIRI) Buy Slacker or Pandora?

Yesterday TWX, a member of our forums, brought to our attention a patent that was filed back on June 19th, 2008 and owned by XM Satellite Radio. According to the U.S. Patent and Trademark Office (USPTO), the basis of this patent is as follows:

“The present invention relates to a system and method for providing a broadcast radio service listener with the ability to generate a personalized radio channel play-list on a radio receiver from broadcast content as it is received. More specifically, the present invention relates to a system and method for buffering content from a set of channels selected from among the broadcast channels of a source stream(s) as they are received, and for generating a playback stream using the buffered content that provides a multichannel listening experience to the user with preview, reverse, fast forward and other navigation functions for the buffered content.”

– United States Patent Application #20090320075

In fact, Slacker, Pandora, and Last.fm are specifically referenced within the filing as examples of what the purpose of the patent is geared towards. The filing states that “on-line personalized radio services [have] demonstrated its appeal to music fans as evidenced by the continued growth of personalized radio service providers such as Pandora, LastFM and Slacker. These providers assemble personalized play-lists for users by accessing a large music library where each song has a meta-data field containing ratings on multiple stylistic parameters.” The patent filing goes on to say that “a need exists for a live satellite radio offering with low cost hardware that does not require a large local song database to be built over time at a satellite receiver by recording content matches received over-the-air or via other broadcast method.” Read More

Hurricane Katrina: Bob Edwards On Sirius XM Radio Takes A Look Back After Five Years

Posted 27 Aug 2010 — by Dennis "Cos" Costa
Category Sirius XM (SIRI) News

by Dennis “Cos” Costa

This Saturday, August 28th, at 8:00 A.M. ET, on Sirius XM’s (NASDAQ: SIRI) Bob Edwards Show on XM Public Radio channel 133 and Sirius channel 196, Edwards will broadcast his first of two upcoming programs exploring the life experiences of people trying to survive — and save Louisiana. With all of the news and video coming out of the Gulf of Mexico since the BP oil rig disaster on the Deep Water Horizon on April 20th, 2010, not much mainstream media news has been reported on the recovery status of the Gulf Coast states since Hurricane Katrina.

The first of the series will be looking at the people and their struggles through a series of  in-depth special reports and interviews with fishermen, biologists, hunters, professors, and of course, the weary residents of Louisiana discussing how the oil and gas industry has been helpful, and how it has hurt the coastal areas.

In the second of the scheduled programs “No Place like Home: The Vanishing Culture and Ecology of Coastal Louisiana, Bob Edwards will bring you inside the “perfect storm” that has changed the coastal culture forever — ecologically, economically, and emotionally for the people who for generations have lived in these Gulf Coast regions. Again, through a series of interviews and reports, there will be discussion of how to rebuild the wetlands and try to restore a way of life from being washed away by the powerful storm from five years ago, and from the more current oil spill that has again devastated a slow-to-recover area. The second part in the series will air on Wednesday, September 1st. Read More

Are You Ready For Some Football Sirius XM (SIRI) Style?

Posted 26 Aug 2010 — by Brian "Newman" Rayl
Category Sirius XM (SIRI) News

By Brian “Newman” Rayl

Satellite Radio Playground - Sirius XM Satellite Radio (SIRI) Hosts channels dedicated to everything related to the National Football League (NFL) as well as to Fantasy Football and other Fantasy Sports.The National Football League (NFL) regular season kicks off on Thursday, September 9th in a rematch of the 2009 NFC Championship game between the New Orleans Saints and the Minnesota Vikings (a game which has changed the overtime rules of the NFL after a field goal won the game in overtime for the New Orleans Saints, who would go on to win the Superbowl). Sirius XM (NASDAQ:SIRI) is of course covering this game — and every other game of the season — live on satellite radio. To view the Sirius NFL Schedule click HERE and for the XM NFL schedules, click HERE. For XM Subscribers, you must have the “Best of Sirius” package in order to listen to the NFL.

The NFL Channel is on channel 124 for both Sirius and XM subscribers and hosts an amazing lineup of show hosts. Catch The Sirius Blitz weekdays from 11am-3pm with John Madden, Adam Schein, and Rich Gannon. Movin’ The Chains airs every weekday from 3:00PM to 7:00PM ET with hosts Pat Kirwan and Tim Ryan, who check in with players and coaches from around the league. Before the games, catch Howard David and Ross Tucker on Press Pass Sunday mornings from 8:00AM t0 12:00PM ET, as they bring you the last minute news from around the league before kickoff. Can’t catch all of the games? Listen to NFL Rewind on Sunday night from 8:00PM to 12:00AM ET with Jack Arute and Jim Miller for an in-depth look at the biggest stories around the NFL.

Fantasy sports have become a huge tradition for millions upon millions of armchair quarterbacks, and none more so than fantasy football. With regular season less than 2 weeks away, most fantasy football leagues are in the midst of their own drafts. Because of its popularity, Sirius XM has even devoted a channel for the fantasy lover called Fantasy Sports Radio airing on Sirius channel 211 and XM channel 147. This time it is Sirius subscribers who will need a “Best of XM” package in order receive this unique content. Read More

Howard Stern Responds To Being Ranked The #2 Most Important Radio Talk Show Host Of All Time

Posted 25 Aug 2010 — by Demian Russian
Category Sirius XM (SIRI) News

by Demian Russian

Howard SternSirius XM Radio’s (NASDAQ: SIRI) Howard Stern responds to being ranked the second most important radio talk show host of all time by TALKERS magazine. For the occasion of TALKERS magazine’s 20th anniversary, the publication released their “Heaviest Hundred” ranking of the most important radio talk show hosts of all time. Howard Stern came in at #2 behind Rush Limbaugh in the top spot. In response to a caller on his show, Howard Stern questioned TALKERS Magazine’s description of Limbaugh as “the most important innovator in modern news/talk.” Stern responded, “There was no Rush Limbaugh till I came along. He failed on radio for years till he heard what I did.” Stern added that he has been more popular in the ratings and has brought in more revenue than Limbagh.

“The hardest time to be on radio is mornings. “(Rush Limbaugh) is a guy who’s on in middays on AM stations. He does okay in some markets. In New York he doesn’t do that well. Rush Limbaugh would not make it in mornings. Midday, there’s no expectations. Who’s he competing with? You put me on in middays, I’d have a 100 (percent) share.”

– Howard Stern

In response to how many subscribers Rush Limbaugh would bring to Sirius XM if he were signed, Howard Stern stated, “I don’t think he’d bring in 300 subscribers.” Stern ranks Bob Grant, who ranked #11 on Talkers Heaviest Hundred list, as possibly the top political talk radio host of all time. “The entire Rush Limbaugh act was done much better by Bob Grant, who’s 10 times the entertainer. I’d put him on my channels if he wanted, that’s how good he is,” Stern said. Read More

Sirius XM (SIRI): Satellite Radio Round Table #3 — Tonight @ 8:00PM ET

Posted 24 Aug 2010 — by Demian Russian
Category Sirius XM (SIRI) News

by Demian Russian

Playground RadioThe August 2010 edition of Satellite Radio Round Table airs live tonight (August 24th) at 8:00PM ET. The Satellite Radio Round Table is a collaborative effort of Satellite Radio Playground, SiriusBuzz, and Orbitcast to bring Sirius XM Radio (NASDAQ:SIRI) fans and investors a unique and varied perspective of the Satellite Radio landscape. Last month’s Satellite Radio Roundtable was hosted by Satellite Radio Playground on Playground Radio. SiriusBuzz will be hosting this month’s Satellite Radio Round Table on their Satellite Radio News radio program.

This month’s Satellite Radio Round Table topics will include: Satellite Radio 2.0, Howard Stern, Slacker/Pandora, the FCC station lease-back issue, John Tinker’s recent initiation of Sirius XM coverage for Maxim Group, the NAB/RIAA FM radio mandate proposal, and more.

Spencer Osborne from SiriusBuzz will be moderating this month’s round table discussion. Tonight’s Satellite Radio Round Table will air live on Satellite Radio News at 8:00PM ET. Following the live broadcast, the show will be available for streaming or download as an Mp3 file or via iTunes. Listeners who would like to participate in the live discussion can do so by dialing (347) 945-7995. Read More

Should Sirius XM (SIRI) Buy Slacker or Pandora?

Posted 21 Aug 2010 — by Brian "Newman" Rayl
Category Sirius XM (SIRI) News

Co-Authored by Brian “Newman” Rayl and Dennis “Cos” Costa

Satellite Radio Playground - Sirius XM Satellite Radio (SIRI) Should By Slacker and PandoraA short time ago my partner Demian Russian wrote an article comparing Sirius XM Radio (SIRI) to a newly announced Slacker integration of ABC News. This sparked a conversation on our message boards and during our weekly Playground Radio show, which compared the pros and cons of each company’s offered services. Of course a discussion of these markets and operating platforms requires consideration of Sirius XM’s competition as a whole. Aside from the plethora of local Internet radio stations that we could talk about, whose programming is generally local and serves a different market, we instead turned our attention to the two audio players that are most frequently compared to Sirius XM as their competition — Slacker and Pandora.

Satellite Radio Playground - Sirius XM Satellite Radio (SIRI) Should By Slacker or PandoraIt was decided that we would do a “Bull vs. Bear” type debate, written about the Internet platform and the competition represented by these well known companies. A funny thing happened to us on the way to the debate table –  both of us could not come up with a valid disagreement between the two of us. Instead, we determined that the main disagreement between us was the impetus for Sirius XM to commit to such a move in the first place. Should Sirius XM Radio develop a more complete package for the Internet platform themselves, or should they consider an outright purchase of either of these two companies? Integrating either’s feature-packed software into the satellite radio company’s superior content might be the more preferred option, building on already well known and received services which both companies now enjoy. Read More

Sirius XM (SIRI): Maxim Group’s John Tinker Lays Out His Case

Posted 20 Aug 2010 — by Demian Russian
Category Sirius XM (SIRI) News

by Demian Russian

Maxim GroupMaxim Group senior media analyst John Tinker initiates coverage of Sirius XM Radio (NASDAQ: SIRI) with a BUY rating and a $1.40 price target. Calling SIRI “under-owned” and pointing to its much lower than average institutional interest when compared to “the usual 70% to 90%,” Mr. Tinker said, “It’s dollar price may be masking an oligopolistic quality of fundamentals that should attract a broader following.” He sees FCF (free cash flow) ramping up to $0.10 in 2012, and even sees “some kind of share buyback as possible” along with the company attaining a 2x net debt to EBITDA multiple in the latter part of that year. Comparing Sirius XM’s audio content inventory to Amazon.com’s (NASDAQ:AMZN) book inventory and comparing Sirius XM to Netflix (NASDAQ:NFLX) when factoring valuation, Tinker lays out a compelling case to support his BUY rating.

“We believe that Sirius XM is the “Amazon.com” of the radio space. Amazon displaces local bookstores with limited shelf space by carrying 100% inventory; SIRI improves upon local radio, which has lost its programming originality due to conglomerates like Clear Channel. SIRI has 130 channels, featuring high-profile personalities, sports, and themed music channels.”

– John Tinker, Maxim Group Senior Media Analyst

Tinker finds SIRI’s valuation particularly attractive and noted that Sirius XM’s quality franchise and growth prospects, along with its financial and operating leverage, “suggests that a higher premium is justified.” When discussing valuation, Tinker uses Netflix as its peer, but noted that Netflix is completely dependent on external suppliers, unlike Sirius XM’s hybrid of external and internally produced content. ”We believe that SIRI has a stronger model as it does not rely exclusively on outside products,” he explained. He compares his 14.5x 2011 EV to EBITDA multiple for Sirius XM to a 16.6x 2011 multiple for Netflix to show that Sirius XM’s multiple is still a discount to Netflix. Tinker currently has a SELL rating on Netflix.

He also compared Sirius XM to other traditional media companies, including Viacom (NYSE: VIA) and Time Warner (NYSE: TWX), to show that traditional media’s between 6% and 7% EBITDA growth rate was crushed by Sirius XM’s 5-year compounded growth rate of 24%. Tinker garners additional confidence for his $1.40 price target when considering his DCF (discounted cash flow) analysis, which yields a 12-month fair value target of $1.47. “Given SIRI’s potential 24% EBITDA compound growth rate over the next five years, we believe that a 14.5x 2011 EV to EBITDA multiple is reasonable and would take the stock to $1.40,” Tinker said. He does value Sirius XM’s ~$8 billion in NOLs (net operating losses) in his model and says that the NOLs should save the company $2.8 billion, assuming a 35% tax rate. Read More