As far as earnings, SIRIUS XM made over $71 million for the quarter, or $0.01 EPS.  Sales were up 6.5% at $over $783 million.  Estimates from Thomson Reuters were $0.01 EPS and $785.49 million in revenues.  Revenues were projected to be about $3.3 billion against estimates of almost $3.4 billion.

In short, it was mostly in-line.  SIRIUS XM shares have recovered so much from the lows that it has to beat estimates to keep everyone happy.

The law of large numbers catches up to every company in time.  SIRIUS XM added 542,996 subscribers in the quarter and about 1.7 million in whole year of 2011.  For 2012, that projection is to add 1.3 million, which some price increases may increase churn modestly.

The notion that Sirius XM was started with new coverage at Underweight by Barclays earlier this week is only one more item showing concern.

The positive case: If we are really going to get an explosive auto market later on in 2012, SIRIUS XM stands to win.  Analysts still have a price target consensus of about $2.36 on this stock.  Seeking Alpha has a story titled “Buyback And Takeover Chatter For Sirius; CBS Looks Solid” and that might lure more bulls to tout the stock without even reading the article.

The reality is SIRIUS XM is worth over $8 billion today even after the drop, about 4-times Pandora’s $2.2 billion value.  Pandora is also only expected to report almost $420 million in sales for the year ended January 2013.

With almost 4 billion shares, it is too bad that a reverse stock split would only attract short sellers.  Imagine if SIRIUS XM was able to report earnings of $0.10 ot $0.15 per quarter rather than just a penny each quarter.  It would be a psychological boost.  The short sellers would attack it and the company knows that.  There were already 305 million shares in the short interest as of mid-January and that was the highest short interest reading since last May.

SIRIUS XM is trading down almost 2% at $2.15 against a 52-week range of $1.27 to $2.44.  We have already seen 63 million shares trade hands against an average of 55 million shares a day.  If SIRIUS XM is going to trade down on valuation, perhaps Pandora needs some caution as well unless it can score a massive swing higher in paying subscribers.  Pandora shares are trading down almost 3% at $13.51 versus a post-IPO range of $9.15 to $26.00 and versus a $16.00 IPO price.

As a reminder, investors do have stock options that can be used to hedge this one if they want to stick with it for the long haul.

JON C. OGG

January 2012 is the first time in memory that two different samples of the T206 Wagner card have been for sale in the same month.  If you have nearly unlimited means, a T206 Wagner can end up in your collection right now.  Another T206 Wagner just sold in early January.

Published reports indicate that there may be 50 to 100 samples of the T206 Honus Wagner that exist, but there may only be around 50 in existence after speaking with industry sources.  A sale of $2.8 million for the “Wayne Gretzky” T206 Honus Wagner in 2007 set a record, and that was after the exact same card had been bought for about $2.35 million earlier that same year. 

The reason this card is so rare is known as Honus Wagner decided to have the American Tobacco Company withdraw his card from the T206 series.  The “why” this card is so rare remains a debate even today.  Only a limited number of this card made it out into the public, or at least only a few which are known to have survived.  In the late 1800s and early 1900s, baseball cards were promotional inserts for cigarettes packs and tobacco packages, as well as made for other products.  They were far from being kids’bubble gum cards that later generations would come to cherish.

The most common belief is that Wagner was anti-tobacco and did not want his image promoting cigarettes and tobacco products to children.  Maybe, but Maybe not.  This may have simply been a contract dispute over compensation or terms.  Here is the argument for the latter case… Honus Wagner’s image appeared on cigar boxes in some of the same years around the debated time of 1909 to 1911 when the T206 cards were distributed.  Robert Edwards Auctions has auctioned two such cigar boxes in recent years, and the Baseball Almanac shows these images as well.

While most baseball cards rise and fall in value and can be very cyclical, that just has not been the case for a T206 Honus Wagner.  As it turns out, there are millions of people who collect baseball cards and memorabilia or who have collected in their lives.  The Wall Street Journal reported in mid-2011 that there were 3.1 million millionaires in 2010.  And the same report showed over 40,000 in North America worth $30 million or more.  Some of these people are still collectors and there is no greater prize in sports collecting than being able to flaunt a T206 Wagner.

It was not very well covered in the media, but a T206 Honus Wagner from the famed Dreier collection just sold in early January 2012 through Legendary Auctions.  It was graded by PSA, one of the industry-recognized grading services and the grading brand of Collectors Universe, Inc. (NASDAQ: CLCT).  It was graded as a “4″ (on a scale of 1 to 10).  This famed T206 Wagner sold for an undisclosed sum.  After speaking with Doug Allen of Legendary, it was a privately negotiated transaction.  Mr. Allen would not disclose the buyer nor could we get an exact price, but he quoted, “The sale was for more than $1.5 million.”  An incredible sum indeed. 

Now there is another sample of the card for sale right now, for a hefty price.  Memory Lane has a “PSA 2″ graded T206 Wagner for sale today for a whopping $775,000.00.  It is even advertised on eBay Inc. (NASDAQ: EBAY) as item #290661465614.  After speaking with J. P. Cohen of Memory Lane, this is card is on consignment and had previously been for sale at a higher price and the new price is said to be close to where offers came in for this exact card last year.

These two samples are not the only T206 Honus Wagner cards which have been sold in recent times.  A unique sample was a proof strip from the T206 set which actually belonged to Honus Wagner himself.  This was purchased at the Major League Baseball All-Star Auction by SCP Auctions (for an anonymous client) for the sum of $316,250 in 2010.  It was also SCP Auctions Inc. which brokered the record $2.8 million sale mentioned earlier of the prized Gretzky T206 Wagner.

We covered the short interest changes for the January 13 settlement date and compared them to the December 30 short interest data and added in other color if applicable.

Alcatel Lucent S.A. (NYSE: ALU) rose to 22.54 million shares from over 18.2 million for a gain of almost 24%.

Bank of America (NYSE: BAC) rose 18.5% to 186.1 million from over 157 million at the end of December.

Dendreon Corporation (NASDAQ: DNDN) saw nearly a 6% gain to 34.76 million shares in the short interest to its highest level in a year.

Diamond Foods, Inc. (NASDAQ: DMND) saw a gain of 12% to 10.46 million shares during its time of accounting woes, but this is still not as large as in OCT/NOV-2011.

First Solar, Inc. (NASDAQ: FSLR) was down only marginally.  The solar leader (and whipping boy) was down again to 18.04 million shares from a reading of 18.7 million at the end of 2011. Be advised that this was FIVE STRAIGHT lower readings in the short interest.

Ford Motor Co. (NYSE: F) was up by 14.7% to 147.1 million.

Green Mountain Coffee Roasters, Inc. (NASDAQ: GMCR) remains a battleground stock and the uptick was less than 1% to 26.489 million shares in the short interest.  That is still down about 10% from last year’s peak.

Human Genome Sciences, Inc. (NASDAQ: HGSI) posted another rise in the short interest to a new year record of over 32.2 million shares in the short interest.  So much for loving the lupus drug.

LinkedIn Corporation (NYSE: LNKD) continues to see rising bets against its stock.  The reading was 6.9 million shares short and that marks EIGHT STRAIGHT gains in the bets against the stock.

Netflix, Inc. (NASDAQ: NFLX) may feel after-the-fact now that earnings are out, but the short interest rose by a sharp 25% to 11.422 million shares.  That is the highest short interest reading since last March.  Today’s gains have to be some short covering.

Research in Motion Limited (NASDAQ: RIMM) has had the vultures circling it for some time but this last short interest reading of 36.6 million was down more than 3% and was actually the lowest short interest reading since the end of last July.  Maybe all the short-sale money has been made since the stock fell about 75%.

Sirius XM Radio Inc. (NASDAQ: SIRI) always has a high short interest due to its low price and controversial stock… What is interesting is that the gain was not even 2% in short shares to 305 million BUT… That is the highest short interest since the end of last May.

Your email address

subscribe

terms and conditions

JON C. OGG

While we have some valuation concerns on SIRIUS and while we have some concerns about the future of some of the satellite radio’s top media figures posing a talent departure risk, the news this week that the entire United States car fleet is at a record age is helping to drive Sirius XM bulls.

The same argument can be made for Pandora Media, Inc. (NYSE: P), and that can also be a threat to Sirius XM, but so far this remains a wild card.  Pandora’s stock is still at only about half of its post-IPO peak in 2011 even though it has managed to score several key auto-maker option pacts ahead of the Consumer Electronics Show.

Ford Motor Co. (NYSE: F) and General Motors Company (NYSE: GM) also have a huge opportunity ahead.  Ford has even reinstated its dividend sooner than expected.  Car buyers are not ramping up hybrid buying due to cost, but many of the new cars sold will in fact be Sirius XM subscribers.  Some may even be Pandora subscribers.

Last night Jim Cramer even talked up the auto parts sector on CNBC’s MAD MONEY because of the coming car sales boom.  It turns out that even the most frugal of the frugal can only drive an old car for so long.  Eventually, the cost of maintenance and repairs exceeds the cost of a new car even if the car is not quite what a buyer would prefer to drive.  After all, what good is it to have a car with a $30,000 new sticker price  that is 80% or 90% devalued for trade-in if you have to keep putting in $200 to $500 every three months in repairs and band-aid work?

SIRIUS shares closed out 2011 at $1.82, and now shares are up 18% even though today’s $2.15 price is a tiny loss.  Here are some year-to-date comparisons for 2012 so far: Pandora is up 29.5% YTD,  Ford is up almost 17% YTD, and GM is up 21% YTD in 2012.

JON C. OGG

The list includes the following still-public stocks: Alimera Sciences, Inc. (NASDAQ: ALIM); AMR Corporation (NYSE: AMR); American Apparel, Inc. (AMEX: APP); Eastman Kodak Co. (NYSE: EK); Energy Conversion Devices, Inc. (NASDAQ: ENER); FriendFinder Networks, Inc. (NASDAQ: FFN); Nortel Networks Corp. (NRTLQ); Pinnacle Airlines Corp. (NASDAQ: PNCL); Reddy Ice Holdings, Inc. (RDDY); YRC Worldwide Inc. (NASDAQ: YRCWD). 

Almost all of these have either had a form of bankruptcy or reorganization, while others have been in the rumor mill for quite some time.  We included a write-up on each, and have even have gone as far as discussing some caveats which could help some of these stocks to survive. There is even a chance that a couple of these could end up being major turnaround stocks.

Alimera Sciences, Inc. (NASDAQ: ALIM) saw a share price implosion take place in November after the FDA all but rejected its eye drug.  We covered this one at BioHealthInvestor with a near 75% drop on the news after being public less than two years.  Shares fell to $1.96 with a $61 million market cap and shares are now at $1.30 with a $41 million market cap.  The good news is that it has no debt overhang and it may be able to scrap operating costs down to nothing.  Still, we cannot see how it can fund itself through another set of trials.  Mathematically it is more than financially challenged, even if the company manages to hang on as a NASDAQ listing.

AMR Corporation (NYSE: AMR) is effectively done already.  We had been expecting an NYSE delisting notice to come for a while, even though there was a time even in the last week of the year where shares gapped up big and traded as though there may be some intrinsic post-bankruptcy value left for common shareholders.  That would not be the normal post-bankruptcy value.  While anything is possible, this one will move to the pink sheets and will trade around with a 5-ticker symbol for a while.

American Apparel, Inc. (AMEX: APP) has so far managed to avoid being delisted and so far managed to avoid a bankruptcy through a shaky history.  Still, things have been sketchy here for so long that even a near-40% jump in shares from $0.57 to $0.75 since its early December business update showed improving store sales metrics.  This company has managed to survive on less than $10 million in cash but still has a net tangible value of $56 million despite a loss in 2010 of $86 million.  Here is the caveat” American Apparel has managed to exist in this diminished state for some time and its controversial CEO has managed to hang on.  Maybe the company can pull a rabbit out of a hat and turnaround.  American Apparel often notes “going concern” as a risk under its safe harbor statements in press releases.

Read Also: Analysts Top Biotech Stocks For 2012

Eastman Kodak Co. (NYSE: EK) has done everything wrong and had everything go wrong that could go wrong.  Antonio Perez has been on our list of CEOs that need to be fired for years now and the company has stuck its head in the sand for far too long.  The bankruptcy rumors have swirled for long enough.  The real value left in the company is in the patents, but the company has not been able to make its patent machine turn into a survival machine.  The KKR board members have also resigned and that could be a sign that the private equity firm will try to force a move here so it can secure whatever value is left. At the end of September when we polled our readers, the poll response was that Kodak was more likely to go bankrupt than Greece.  Ouch.

What is interesting about the news is that China has been reported as cutting its export quotas for the year ahead. The problem is that the levels are still higher than what many investors were expecting.  Further increased production targets from both Lynas (Australia) and Molycorp are also expected to weigh on prices of rare earths.  It is currently overlooked that Molycorp’s production is mostly booked up for a year (and more from some customers) at this point.

Avalon Rare Earth Metals Inc. (AMEX: AVL) s down “only” 3.1% at $2.50 and Rare Element Resources Ltd. (AMEX: REE) is down 6% at $3.41 on the day with a new 52-week low.  The Market Vectors Rare Earth/Strategic Metals ETF (NYSE: REMX) is down only 1.2% a $15.01 and its 52-week range is $13.82 to $28.91.

Based upon its valuations, we recently provided a full outlook for 2012 in Molycorp because its stock has been sold down so much from highs.  The short version is that the stock is attractive, but there are some serious caveats.  What price Molycorp truly bottoms out at is truly guesswork.

Investors need to understand one key issue about Molycorp.  It is a euphoria or hypochondriac when it comes to its stock.  China has proven to be untrustworthy when it comes to forecasting output versus saber-rattling over what it is willing to export (and at what price).  If China comes back out and says in the first quarter that its rare earth supply quotas are being absorbed too rapidly and that it will not allow exports later in the year, then traders and investors will not bother conducting even a forward P/E analysis in Molycorp shares.  They will just start loading up.

The other side of the coin is that China could cheat on its export quotas.  It would be no surprise, and there is some history to suggest that it could happen.  Does each nation inside OPEC actually stop every barrel of oil exports when they hit the OPEC-mandated quotas?  Sometimes yes, many times no.  When news comes out (if it does) that Chinese companies have sold more rare earths than what was expected, it is only normal to expect investors to sell the shares off without conducting any analysis.

Molycorp is now down over 8% and share hit a 52-week low after breaking under $25.50.  This is the hypochondriac version of the stock… bad headlines kill the stock, regardless of what should have already been priced in.  The market has known for some time that China is not going to be as strict as investors once feared.  Molycorp has also lost literally two-thirds of its value from the peak of $79.00. 

It is our take that the market has proven over and over in 2011 that it is just not capable of pricing in good news or bad news any longer.  That is exponentially the case for a company in rare earths.  Still, today’s news should have been fairly easy to anticipate.

JON C. OGG

The company’s stock has risen from lows again because China is slowing some exports of the rare earths metals needed by technology, medical and high-tech companies. The reason is due to environmental issues. Avalon Rare Metals Inc. (NYSE: AVL) is the far more speculative outfit, with no real history. And then there is the diversified but still speculative ETF called the Market Vectors Rare Earth/Strategic Metals ETF (NYSE: REMX).

Molycorp is not exactly a cheap stock. If you are basing the operations of today and the trailing 12-month period as the key, then it is even very expensive. What the company currently has is a near-monopoly in U.S. domestic assets for rare earth metals and minerals already in development. At $28.70, the 52-week trading range is $25.60 to $79.16. If any serious news were to come out that helps rare earths again or any positive income acquisitions were made, then we can easily see Molycorp rising on a wave of momentum into the $40s. As long as no bad news comes out, its downside in a stable equity market might only be in the low-$20s or mid-$20s.

No warning will be well-received, and it is very possible that Molycorp could settle lower if the rare earths hopes do not live up to par. Still, it is now fully funded and it effectively has its production capacity close to fully ordered.

Our biggest concern is that Thomson Reuters still has a consensus price target of $64.50. Our take is that this is far too high. We think it could easily run into the $40s, and if the news is sustainable then perhaps a tad higher … but nowhere close to $64.50. That high of a consensus price target might even be the result of some figures not being included or updated. This gives more room for analysts to downgrade the stock and/or to significantly lower expectations.

This trades at 19-times expected 2011 earnings, but only 9-times expected 2012 estimates. Dahlman Rose has said that rare earth prices will come down in 2012, so even if you take $2.50 EPS as a lower number, then Molycorp still only trades at 11.5-times expected 2012 earnings. It still trades at about 3-times book value, but we would expect that to improve a bit in the next year or two.

JON C. OGG

The company noted that the new Latin channels will come with commercial-free music and also will be from leading providers of Spanish-language sports, news, talk and entertainment.

Subscribers can access these new channels through SiriusXM Internet Radio and through the SiriusXM Internet Radio App for smartphones and mobile devices. The company also claims that its new 2.0 technology can deliver about 25% more bandwidth capacity.  The new channels are also available by satellite through the new SiriusXM Edge, the first satellite radio able to receive the expanded programming lineup.

The reason for this expansion is simple.  Spanish-speaking television, radio, and content is growing at a faster rate than any demographic in America.  The SiriusXM Latino channel lineup will now feature exclusive commercial-free music channels covering a wide variety of music genres, including:

• Caliente, channel 150: biggest hits of tropical, salsa, merengue and Reggaeton
• Viva, channel 500: Latin stars in contemporary pop, alternative and ballads
• La Mezcla, channel 503: top hits in Spanish and English,
• Flow Nacion, channel 506: Latin hip-hop and Reggaeton
• Aguila, channel 510: The sound of Norteno bands, Ranchera, Duranguense and the sounds of traditional Mexican music
• Caricia, channel 523: classics from unforgettable artists in Spanish and English
• Luna, channel 530: Latin percussion and Afro-Cuban rhythms blended with Jazz
• La Kueva, channel 540: Latin rock classics and today’s upcoming artists
• RadioFormula Mexico, channel 560, 24/7 news and talk from the leading radio broadcaster from Mexico. 
• It joins on the SiriusXM lineup CNN’s 24-hour Spanish-language news network, CNN en Espanol on channel 148. 
• Playboy Radio en Espanol, channel 569
• Iconic talk show host Cristina Saralegui’s Cristina Radio will feature lifestyle, health and family programming for Latinas, produced by National Latino Broadcasting and launching in the coming months.

More Latino coverage will be Spanish-language sports coverage:

• play-by-play from NFL teams. Play-by-play will be available on multiple Deportes en Vivo channels, XM channels 550-556, which will also carry sports play-by-play from major college programs such as Army, University of Texas, Oregon State University and University of Nevada, among others, as well as an expanded lineup of MLB games. Deportes en Vivo channels supplement existing Spanish-language sports programming on SiriusXM that includes ESPN Deportes Radio, channel 149, which features sports talk and soccer matches from Spain’s La Liga—including FC Barcelona and Real Madrid—the Mexican Primera Division, CONCACAF, Major League Soccer and more.  MLB en Espanol, XM channel 175, will continue to feature Spanish-language broadcasts of MLB games throughout the season. Not all sports programming is available online.

The expanded (English) programming offering from SiriusXM includes: 

• Rock and Roll Hall of Fame Radio
• RockBar
• Classic College Radio
• Red White & Booze
• Krishna Das Yoga Radio
• Carlin’s Corner (in honor of George Carlin)
• UCB Radio (voice to the underground sketch, improv and stand-up comedy)
• Dirty Dog (rude and raucous comedy)
• ESPN SportsCenter

One thing that is interesting is that Sirius XM disclosed in its annual report earlier this year that its letter of intent with ACIR DARS Mexico to pursue a license to offer satellite radio in Mexico was terminated in May 2010.

Edge is on sale now at www.shop.siriusxm.com and  available at 2,500 retail locations nationwide by this holiday shopping season. More programming and expanded listener capabilities will be announced in the coming months as Sirius XM builds upon the new 2.0 technology.  This is also being offered on a $199 annual subscription rate as a savings plan.

Sirius XM Radio shares are up only 1% at $1.83 on the day. 

JON C. OGG

According to a report in The New York Times, data on the heavy rare earth deposits have been overlooked since the days when Unocal owned the mine.  The heavy minerals have been there, it’s just that no one noticed.

Molycorp’s discovery comes at the same time that Vale SA (NYSE: VALE) revealed that it has discovered rare earth minerals at one of its Brazilian copper mines. That discovery, according to The Wall Street Journal includes what are supposed to be “safe” radioactive elements that could be classified as rare-earth minerals.

China holds a dominant place in the current production of rare earth minerals, including about 99% of total global production of the heavy variety. Australian miner Lynas Corp. (OTC: LYSCF) is in the early stages of rare earth production and ultimately plans to meet 20% of global demand for rare earth minerals as China seeks to diminish its role as virtually the world’s sole supplier. Molycorp aims to be the world’s largest supplier of light rare earths by the end of 2014.

As more deposits are found and mining begins, the astronomical prices recently seen for the rare earths will decline. Companies that use rare earth minerals in manufacturing are also actively seeking substitutes for the scarce and high-priced rare earths. Molycorp also hopes that its revelation of the heavy mineral deposit will head off some of that searching.

Rare earths are not really rare, they just occur in such low concentrations that finding a deposit worth mining is difficult. And mining produces low-level radioactive waste, which is a regulatory problem for some companies, though Molycorp dodges that by having a permit to mine issued in the 1950s. Avalon Rare Metals, Inc. (AMEX: AVL) does have Canadian regulatory permits for some of its projects, while Rare Element Resources Ltd. (AMEX: REE) continues with exploratory drilling at its property in northeast Wyoming.

Avalon shares are up more than 3%, to $2.50, in a 52-week range of $2.29-$10.11. Losers include Rare Element Resources Ltd. (AMEX: REE), which posted a new 52-week low of $3.86 this morning and China Shen Zhou Mining & Resources, Inc. (AMEX: SHZ) is down more than -4%, at $1.14, in a 52-week range of $0.97-$10.84.

For its part, Molycorp shares are up more than 7%, to $32.30, in a 52-week range of $26.02-$79.16. The Market Vectors Rare Earth/Strategic Metals ETF (NYSE: REMX) is down about -0.5%, at $14.33, in a 52-week range of $13.82-$28.91.

Paul Ausick

Today it is in the news after having confirmed the identity and site location of the shipwreck of the SS Gairsoppa, which was a 412-foot steel-hulled British cargo ship that was torpedoed and sunk by a German U-boat in February 1941.  This ship was loaded full of millions of ounces of silver.

It was just at the end of March that Odyssey Marine Exploration was named as one of the 24/7 Wall St. most unusual public companies in America.

Unlike controversial shipwreck ownership, Odyssey was awarded the contract under a competitive tender process back in 2010 for an exclusive salvage pact with the U.K. (for the cargo) of the Gairsoppa.  Odyssey to retain 80% of the net salved value of the silver bullion recovered under the contract.

The release noted that research and official documents indicate that the ship was carrying approximately 7 million total ounces of silver, which included more than 3 million ounces of private silver bullion insured by the UK government which would make it the largest known precious metal cargo ever recovered from the sea.

This will be no easy task and it isn’t exactly like a scuba team can just hoist the silver up.  The wreckage is said to be nearly 4,700 meters below the surface of the North Atlantic.  It is also about 300 miles off the coast of Ireland in international waters.

Remotely Operated Vehicle operations allowed for video and photographs of the shipwreck and now the company is in the planning phase for how to recover the silver.  The current time line given by the company is that it anticipates operations will begin in the spring as soon as the weather window begins to open up in the North Atlantic.

iShares Silver Trust (NYSE: SLV) is how more and more investors track silver these days.  Odyssey is probably not as thrilled that the $40.00 reading on September 13 has fallen to just under $30 in less than two-weeks.  Still, money is money and this could lead to a substantial boost for Odyssey Marine if it can recover the bulk of that bullion.

Odyssey Marine shares are up 9% at $2.90 on about 2.7 milllion shares.  The average volume is almost 1.1 million shares and the 52-week range is $1.68 to $4.43.  Its market cap is also $210 million.

JON C. OGG