Investors who are looking for a relatively cheap stock that can out-perform the market in the next 12 to 18 months should now consider Sirius XM Holdings (SIRI). And this isn't something I would have said weeks ago, especially with SIRI shares currently priced at 43 times trailing earnings, which is more than twice the S&P 500 index (SPX). But a lot has changed in the past 30 days.
Since reaching its 52-week high of $4.20, the New York-based satellite radio provider has seen its stock decline of more than 7%. And with volatility and uncertainty having taken over the market, SIRI shares look poised to go even lower, falling below $3.90: a key resistance level it has not seen since early October. Is that deserved?
Consider that throughout 2015 Sirius, which in December inked a five-year deal with superstar radio personality Howard Stern, has done nothing but crush Wall Street's subscriber projections and raise its own guidance, thanks to strong U.S. auto sales. Plus, on Tuesday the company announced it has added more subscribers than expected in 2015. This means Sirius ended 2015 with 29.6 million subscribers, marking a better than 8% rise year over year (2.3 million), which beat its own forecast of 2 million.
Time to Raise the Bar
For 2016, the company now expects to add roughly 1.4 million subscribers, which would bring its total to about 31 million by the end of the year. And if that seems like a low-ball figure, it is. Like Apple Inc. (AAPL), Sirius is notorious for issuing light guidance. Given the sustained momentum of auto sales, where Sirius gets most of its subscribers via promotional trials, investors can model for an additional 500,000 net new subscriber additions and the figure would still be conservative.
The company also said it sees 2016 revenue of about $4.9 billion, in line with the average analysts' estimates. Assuming my projected 500,000 additional subscribers are realized, combined with a slight increase in ARPU (average revenue per user), it's safe to project revenue total to $5.1 billion, or about 4% higher than the company expects.
Read more: Time to Get Serious About Sirius XM (SIRI) http://www.investopedia.com/articles/investing/010616/time-get-serious-about-sirius-xm.asp#ixzz3wUFl0FSW
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Over the next four quarters, potash shipments for Potash Corporation (POT) are expected to increase to 10.6 million metric tons. That compares to 9.5 million metric tons in the most recent four quarters. Shipments of potash have increased for the company.
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