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Sirius XM (SIRI) Touches a Fresh 52-Week High: Here’s Why


Shares of Sirius XM Holdings Inc. SIRI hit a 52-week high of $6.38 during the trading session on Mar 6, before retracing a bit to close at $6.36.

The company’s better-than-expected performance in 2017 with respect to self-pay subscriber additions is encouraging. Notably, it added approximately 1.56 million self-pay subscribers last year, higher than its guidance of nearly 1.4 million. The stronger performance led to the company ending 2017 with 27.5 million self-pay subscribers. While the comparable 2016 figure was roughly 26 million.

On a further positive note, the new tax legislation is likely to boost the company’s cash generation to the tune of approximately $900 million over the next four years.

Sirius XM’s efforts to reward shareholders through dividends and share buybacks are also impressive. In a shareholder-friendly move, in January 2018, the company’s board of directors cleared an additional buyback program to the tune of $2 billion. As a result, total authorization since the inception of buybacks at the company, now stands at $12 billion. Moreover, in October 2017, the company added shareholders’ value with a 10% dividend hike.

Owing to the tailwinds, shares of the company have rallied 23.3% in a year, outperforming the industry’s 22.8% rise.

A Broker Favorite

We note that earnings estimates for Sirius XM have exhibited a healthy uptrend. Over the last 60 days, the stock has seen the Zacks Consensus Estimate for current-quarter earnings being revised 25% upward to 5 cents per share. Likewise, the consensus mark for current-year earnings has moved 20% north to 24 cents over the same time period.

Given the wealth of information at brokers’ disposal, it is in the best interests of investors to be guided by their expert advice as well as direction of estimate revisions, which serve as important pointers to evaluate the stock price.

Zacks Rank & Key Picks

Sirius XM carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the same space are AMC Networks Inc. AMCX, Entercom Communications Corporation ETM and TEGNA Inc. TGNA. While AMC Networks sports a Zacks Rank #1 (Strong Buy), Entercom Communications and TEGNA carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Shares of AMC Networks and Entercom Communications have gained 4.8% and 2.5%, respectively, in a month while TEGNA has appreciated 6.7% in the last six months.

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