$SIRI 2Bil Share BuyBacks, Improving Auto Sales R

$SIRI 2Bil Share BuyBacks, Improving Auto Sales & Robust Cash Flow (Dec 18 2012)

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Shares of Sirius XM Radio Inc. (SIRI) have had quite a run over the last five months, gaining 35%. The company has a robust cash flow profile, thanks to its operating metrics that are improving consistently. It is well on track to achieving its net subscriber additions target for the full year of 1.8 million subscribers and may even beat it, based on its latest filed results. Key catalysts for the stock are improving auto sales and the recent share repurchase program. SIRI looks attractive on valuations and the long-term earnings growth expectations of 30% will likely boost its valuations. As such, I recommend investors take a long position in SIRI.

According to a recent press release, SIRI is going to initiate a $2 billion share buyback program along with a special cash dividend of $325 million. This announcement comes as no surprise as the company's management had hinted in its latest conference call that it will start returning capital to its shareholders. The year-end dividend makes more sense in the context of potential changes in tax rates. Moreover, I also expect the company to pay further dividends in the future, given Liberty Media's ownership in the company and its intentions of recovering some of the cash it has spent so far this year to increase its stake in Sirius from 40% to the current 49.8%. Liberty had made it very clear in the past that it expected Sirius to return some of the capital it had spent on the company. Liberty has spent approximately $1.5 billion in the last several months on SIRI's shares.

The decision to pay dividends has come after the company announced that it had entered into a $1.25 billion credit facility, which it will utilize to finance its working capital requirements and share repurchases. The company is now in a position to begin returning capital to its shareholders without hurting its credit profile. Sirius retired over $850 million of its debt in the third quarter of 2012 and ended with $556 million in cash. SIRI's leverage has also improved dramatically in the last year, ending the last quarter at slightly under 2.8x, down from 4.3x at the end of Q3 2011.

Cash Flow Strength

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READ MORE HERE http://seekingalpha.com/article/1070551-siriu...et-options

$SIRI

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$SIRI Announces $2 Bil Stock Repurchase Program And Special Cash Dividend 12/06 08:00 AM


NEW YORK , Dec. 6, 2012 -- Sirius XM Radio Inc. (SIRI:$2.77,00$0.01,000.36%) today announced that its Board of Directors has approved a $2 billion common stock repurchase program. Shares of common stock may be purchased from time to time on the open market and in privately negotiated transactions.

http://investorshangout.com/post/view?id=298489

$SIRI