Berkshire Hathaway (BRK-A), a major holder of Liberty SiriusXM (LSXMA), continues to add to its stake. Berkshire recently bought 1,282,569 shares, paying $36.9 million to increase its holdings by 4%.
Berkshire has been a steady buyer of shares since the start of the year. Going back to 2023, company insiders were more active, largely as sellers of shares, including Liberty’s President, as well as its Chairman of the Board.
Overall, Liberty insiders own 33.4% of shares, and institutions own nearly all the remaining shares.
Liberty shares are up just 8% over the past year. The company is coming off a poor earnings season, with earnings growth sliding by 33%. However, investors expect Liberty to improve, and shares trade at just 9 times forward earnings.
Plus, Liberty trades at a slight discount to its book value, and at about 1X its price to sales ratio. Those metrics point to a value-oriented investment with room for increasing cash flow.
Action to take: Investors may like shares here, as the stock looks undervalued and ready to trend higher. It’s also possible that a massive company like Berkshire Hathaway makes a buyout offer for the entire company.
For traders, the July $30 calls are just slightly out-of-the-money. Last trading for about $1.70, they could see mid-double-digit returns in the coming months.
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.