Fundamentally, this stock has several positives. SIRI has a forward P/E of 24, and trades for 29 times free cash flow. EPS for the next five years is expected to rise by 32%. Quarter-over-quarter sales are up 14% and EPS is up 128%. SIRI's TTM ROE is 98%, and the company's net profit margin is 103%.
Technically, Sirius stock has been in a well-defined uptrend since the start of July. The coveted golden cross was achieved by the stock in August. This extremely bullish signal has once again been proven true. The stock has been posting higher highs and higher lows since the start of December.
The big news is Sirius' Board of Directors has approved a $2 billion common stock repurchase program. This should underpin the stock at this level. Secondly, new car sales are up significantly and SIRI is a derivative play on the auto industry. SIRI is well positioned for organic growth and actually added two million new subscribers last year. The recent positive news regarding new car sales and a share buyback program bodes well for the stock.
Moreover, SIRI fourth quarter earnings more than doubled benefiting from continued subscriber growth and lower churn rates. The company reported a profit of $156.2 million, up from $71.3 million a year earlier. You can read the earnings call transcript here. With the stock trading near the bottom of the uptrend channel, now is the time to start a position.