Berkshire Hathaway (BRK-B), a major holder of Sirius XM Holdings (SIRI), recently bought another 3,564,059 shares. The buy increased Berkshire’s holdings of Sirius by 3%, and came to a total cost of $86,730,943.
This is Berkshire’s first big buy of Sirius in over a year. Otherwise, the company CEO bought shares in August 2023, picking up 250,000 shares for just over $1 million. A few company insiders have been sellers this year, including the company’s Chief Content Officer.
Overall, Sirius insiders own 40% of shares, and institutions own another 9.6%.
The audio entertainment company is down 43% over the past year. That’s a bit out of line with the 3% revenue drop and 2% increase in earnings growth.
Thanks to these metrics, Sirius looks like a relative bargain today, trading at just 8 times forward earnings, and less than 1 times its price-to-earnings-growth ratio.
Action to take: Sirius shares have started trading higher in recent sessions, coming off a 52-week low. Contrarian investors may like shares here for further gains in the months ahead. Further buys from Berkshire could cement the company as a value play with more upside now.
At current prices, Sirius pays a 4% dividend.
For traders, the January 2025 $30 calls, last trading for about $1.60, could see mid-double-digit returns in the months ahead if the uptrend underway continues.
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.