The Valuation Call: SIRIUS XM Analyst Downgrade (SIRI)

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It was just late yesterday that we issued a “what to expect now” outlook on SIRIUS XM Radio Inc. (NASDAQ: SIRI) after it hit the $2.00 mark for the first time July-2008.  Apparently the theory of stocks “breaking the buck” hitting new milestones does matter after all.  This morning we have an analyst downgrade… Lazard Capital cut the rating to “Neutral” from “Buy.” 

As you can imagine, this is a valuation call rather than any new smoking guns. We have seen that short sellers hit a new high in SIRIUS XM short-selling activity

In our own outlook yesterday afternoon, we concluded… “At a minimum, it would seem that many SIRIUS XM holders who have been in the stock for less than three years would exercise some prudence and lock in at least some profits.  It now may take new buying interest from a pool of new investors for SIRIUS XM to continue running higher and higher.”

Amazingly, SIRIUS was only down a penny on this downgrade at $1.96 pre-market before 9:00 AM EST, but now we have shares down 1.2% at $1.94 on only about 2 million shares so far with about 15 minutes to the open.  Also, not much has changed here but there was a good hit in the “10 Hidden Gems in the SIRIUS XM Annual Report.” 

SIRIUS XM has set the date of Tuesday, May 3, 2011 in the early morning for its earnings results.  That is now less than a week away.

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JON C. OGG