OMAHA, NE— Berkshire Hathaway Inc . (NYSE:BRKa) (NYSE:BRK.A), led by renowned investor Warren E. Buffett, has increased its stake in Sirius XM Holdings Inc. (NASDAQ:SIRI) with a series of recent stock purchases totaling approximately $42 million. The acquisitions took place over three days from October 16 to October 18, 2024.
The transactions involved the purchase of a cumulative 1,558,702 shares of Sirius XM common stock. The shares were acquired at prices ranging from $26.987 to $27.4305 per share. Following these purchases, Berkshire Hathaway now holds 110,276,790 shares of Sirius XM, underscoring its significant investment in the satellite radio company.
These acquisitions were made through Berkshire's subsidiaries, including Government Employees Insurance Company and National Indemnity Company, among others. As the controlling stockholder of Berkshire Hathaway, Warren E. Buffett is deemed to have a beneficial interest in these shares, although he disclaims ownership except to the extent of his pecuniary interest.
Berkshire Hathaway's increased investment in Sirius XM reflects its ongoing strategy to bolster its portfolio with media and technology assets. Investors will be watching closely to see how this move impacts both companies in the coming months.
In other recent news, Sirius XM Radio has seen significant developments in its financial performance and market ratings. The company's Q2 2024 earnings report revealed an 8% sequential increase in adjusted EBITDA and a 6% increase in free cash flow from the previous year, despite a decline in subscriber and advertising revenue. Analyst firms have made various adjustments to Sirius XM's stock price targets. Benchmark lowered its price target to $43.00 while maintaining a Buy rating. Seaport Global Securities also revised its price target for Sirius XM to $34.00, maintaining its Buy rating.
JPMorgan (NYSE:JPM) resumed coverage of Sirius XM, assigning an Underweight rating and a price target of $20.00, citing concerns about the company's long-term growth prospects despite the recent acquisition of Liberty Sirius. Morgan Stanley (NYSE:MS) also resumed coverage with an Underweight rating and a price target of $23.00, pointing out the company's declining revenue and adjusted EBITDA. On the other hand, Pivotal Research maintained a Buy rating on Sirius XM, emphasizing the company's robust free cash flow capabilities and potential for growth.
The company's merger with a subsidiary of Liberty Media Corporation (NASDAQ:FWONA) has led to various adjustments in its stock price targets by different firms. Citi increased its price target to $21.00, attributing the adjustment to the Liberty transaction and higher capital expenditures. These are among the recent developments that Sirius XM investors should note.
InvestingPro Insights
Berkshire Hathaway's recent investment in Sirius XM aligns with several positive indicators highlighted by InvestingPro. According to InvestingPro Tips, Sirius XM is trading at a low P/E ratio relative to its near-term earnings growth, suggesting potential value for investors like Buffett. The company's P/E ratio stands at 8.21, with an adjusted P/E of 6.99 for the last twelve months as of Q2 2024, indicating an attractive valuation.
Furthermore, Sirius XM has demonstrated financial stability by maintaining dividend payments for 9 consecutive years, a factor that likely appeals to Berkshire's long-term investment philosophy. The company's current dividend yield is 3.85%, with a dividend growth of 9.92% over the last twelve months.
Sirius XM's recent performance has been noteworthy, with InvestingPro Data showing a significant 18.65% price total return over the past month. This short-term momentum, coupled with analysts' predictions of profitability for the current year, may have influenced Berkshire's decision to increase its stake.
For investors seeking a more comprehensive analysis, InvestingPro offers 8 additional tips for Sirius XM, providing deeper insights into the company's financial health and market position.
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