Berkshire Hathaway (BRK-A), a major holder of Liberty SiriusXM Group (LSXMA) recently added over 2.7 million shares in two transactions. The buy increased the company’s position by 10 percent, and came to a total cost near $85 million.
That’s the first insider buy since August, when the company’s Chairman bought 140,000 shares for just under $5 million. Otherwise, there have been a few insider sales, including multiple company directors and the CEO.
Overall, Liberty insiders own over 10.2 percent of shares, and Berkshire owns over 22.5 million shares, or nearly 25 percent of the company’s float.
The media conglomerate is down nearly 25 percent over the past year. Earnings have suffered even more, down 63 percent, as ad revenues have been declining in the media space.
On the plus side, Liberty now trades at about 10 times forward earnings estimates, and shares are going for about their book value.
Action to take: Investors may like shares here as a contrarian trade. Media companies have been out of favor with the market for a while now and valuations are starting to look more attractive. Liberty does not currently pay a dividend.
For traders, despite the poor performance in shares, they have been trending higher since September. The April 2024 $35 calls, last going for about $1.85, could see mid-double-digit returns or higher on a further uptrend.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.