SIRI Breakout trade WATCH for breakout above 5.51 Target: 5.76, 5.3% P/L ratio: 3.5 : 1 - Excellent
Duke: A Bold Prediction--Part 1
Last week I told you that I expect SIRI initiated a retention plan during Q2 so that it can insure that self pay subs come in at between 345-365k so that SIRI doesn't have to cut guidance this Q. But that doesn't insure that you are going to get the upside breakout that you are all expecting. There are a lot of other numbers and overall factors that you are forgetting to consider, so let's take a look at some of them. The first one is overall sub growth. The retention plan will help here since every sub that is kept on the plan is one more in the overall sub total. Having said that, I expect that we will see another death cross story where self pay subs exceed overall sub growth. As I mentioned two weeks ago, it was a TELL, when SIRI dropped guidance on overall sub growth in Jan. and only gave us guidance on self pay growth. They knew what was coming. Q1 was a big surprise when new sub additions came in 2k below self pay adds. Things have only gotten worse since then when you look at the source of trial subs. New car sales were only down 61K in Q1 and the death cross appeared. In Q2 they fell 122K on a year over year basis. Therefore, I expect the death cross--the difference between self pay adds and new sub growth to widen. At some point it will become apparent that the decline in trial sub growth portends a major reduction in 2018 guidance. When that realization hits, the stock will take a hit. Is this Q the inflection point or will the realization point hit next Q. It is anyone's guess. I expect profit to hit 4 cents which is the prediction. The problems will come next Q when profit is projected to hit 5 cents. Q3 profit will be negatively impacted by the premiums the company had to pay to prepay two sets of bonds.The first issue carried a 1% prepayment penalty while the longer dated issue was a little over 2%. Put the two together and you are looking at 15M or about a third of a cent in Q3. We will worry about that next Q.The only other problem I foresee is free cash flow. The decline in new car sales is a negative as well as the size of the retention discounts so FCF could come in light but not enough to impact the stock. So everything looks fairly nominal except for The Death Cross and we are ready to explode on Thur. Maybe or maybe not. You are all forgetting that SIRI has always lowballed guidance so that it can raise it later and juice the PPS. The Street is well aware of this. If my predictions are correct, SIRI will be able to reiterate guidance but not raise it. Most of the Street analysts had sub growth pegged at 1.3-1.4M. So it is possible that the Street will see a second reiterate as a downgrade to expectations and the stock could easily sell off. At some point SIRI is going to have to beat expectations or the stock will sell off. I suggest you not take anything for granted on Thur.
Patrick.... just leave.... you are like a rain cloud.
Testing the $5.50 to death! Should make for excellent support once it breaks though.
6 months of Sirius XM for 40 dollars!!!!! What a deal
This really doesn't make sense Sirius is a money machine how is it only at five and pandora is is almost double #$%$
tomorrow at 10
Duke: A Bold Prediction--Part 2
Given what I wrote in Part 1, it should come as no surprise that I will go into the CC without a position in SIRI. Things should be clear shortly after the open. If the stock is going to take off there is plenty of room to scalp a few pennies before the downturn and second move up. Remember I have a $5.67 target price on the stock but that target may come in the run up to Q3. If we get a sell off the support levels are $5.32 and 5.20 One final word on the CC. SIRI is an auto part and the auto part stores and the parts suppliers that have reported in the past 30 days have all missed and cut guidance. SIRI is different but operates in the same sphere. It will be interesting to see how Frear ducks the question that is coming about the future. Bonus question for all my thoughtful readers. Why wouldn't JM want to engineer a ST sell off in SIRI to pick up some cheap shares of SIRI? For my less thoughtful readers why has JM sold millions of shares of the tracking stock this summer? There have been two sales this summer for those not paying attention. If you remember when I returned from the World Series of Poker, which concluded with a bad beat at 4AM this morning, I told you that the Eiffel Tower would be built on the left side to 2485-2510 before a 10-12% correction in Sept.-Oct. The left side almost got built out this week as we hit 2477. One of the two analysts I told you to follow was John Hussman. In last week's commentary he made a bold prediction that mirrors what I wrote earlier. Here are his thoughts. Bubble inflection points occur when self reinforcing speculation moves to fragile instability. Collapse is fundamentally due to unstable positions while the instantaneous cause of the crash is secondary. His bold prediction was that we would reach an inflection point during the first week of Aug. Hussman was quick to point out that he was NOT predicting a peak in the market that week or that the crash would begin. He was simply saying that the inflection point was reached and that the market would be primed for a major pullback. In Part 3 we will review why we could see a pullback.
YUP! Just let the Bollingers tighten up a little more then... POW!
Duke: A Bold Prediction--Part 3
If Hussman has it right there are market internals that are building up waiting for an ignition switch that will cause the initial decline. So what are the internals that we can see today. First, margin debt continues to climb weekly and sets new all time highs with every weekly reporting period. Contrary to the money on the sideline meme, speculators have levered up to grab as much free money as possible. Why not since the Fed has you back and the only way the market can go is up. BTW, Caldaro and the Elliott Wave group is still predicting a market top of 3000 in 2020. Anyway a sell off has the potential to feed on itself as margin calls go out. Second, one of the big money makers on the Street has been selling puts to the suckers expecting a crash. Remember as the seller of a put you are betting that the stock will NOT decline. If you are right, you get to keep the premium. It is found money. If you are wrong, you are forced to buy the stock. People are playing this game for the premium, not because they want to own the stock. Therein lies the problem. If the market declines there will be a lot of forced buyers who have no intention to become investors. Once they own the stock, they will dump the shares exacerbating the decline. Finally, there are our friends the shorts. If you notice they are a dying breed. Even the SI in SIRI has been falling over the past three months. While you guys hate the shorts, you seem to forget they represent buyers when a stock falls. Overall short interest has fallen to levels not seen since 2007. Throw in derivatives that leverage investments 50-100 times and you have the kindling. So what about the precipitating event. Pick one. The Fed is going to start cutting the balance sheet in Sept. The government needs to pass a budget before it can vote on tax cuts. We need to raise the debt ceiling before we run out of money in Oct. and the government closes. Something we can't foresee. Let's focus on Thur. Sept is still five weeks away.
DOWN?? We're .11 off 52 week high. .07 trading range today and probably until earnings and then hopefully a breakout.
Testing...1 - 2 - 3 ....testing.....
Seems to me someone is getting the buybacks done on everydown day big comebacks or smart investors getting in at the right times
what a rip off Sirius radio is. I paid 600.00 for a lifetime subscription and Sirius is not honoring their commitment to me. I have been told several times by Sirius employees I would be contacted next day. never happens. Sirius radio is a fraud.
Nothing's going to happen until after earnings report next week.
Blaa..blaa..blaa.. always down before earnings report ..no worries
this story is getting old.. fast!
Sirius XM is five cents from hitting a new fifty two week high and all signs are positive: Earnings, dividends, Pandora, Canada, Warren Buffett, Amazon, Malone and the most important of all, My Cheri Amour !!!!!