I cringed at the headline: "Why decimalization is a bad idea." It's the second article I had seen in as many days apparently supporting a proposed new Congressional bill that I find incredibly stupid.
Of course, I'd also misread the headline. What it actually said was "Why�dedecimalization is a bad idea" [emphasis mine]. And it wasn't just the headline that Felix Salmon nailed, as he concluded in the post that "there's no way that small investors can possibly benefit from this."
Amen.
But let's backtrack for a moment. The "problem" this bill attempts to rectify is that there are many small public companies out there that don't have much Wall Street research coverage. The reason is that trading is so sparse and spreads -- that is, the difference between the bid and ask prices -- are so thin that there's little money for Wall Street firms to make trading the stocks and, thus, little reason to follow them closely. This situation was a result of "decimalization" -- the changeover from quoting stocks in fractions to decimals, which allowed bid/ask spreads to fall in many cases to just a penny.
Top 5 Penny Companies To Invest In 2014: Sirius XM Radio Inc.(SIRI)
Sirius XM Radio Inc. provides satellite radio services in the United States and Canada. It broadcasts a programming lineup of approximately 135 channels of commercial-free music, sports, news and information, talk and entertainment, traffic, and weather on subscription fee basis through two satellite radio systems in the United States; and holds an interest in the satellite radio services offered in Canada. The company also simulcasts music and selected non-music channels over the Internet; and offers applications to allow consumers to access its Internet services on mobile devices. As of December 31, 2010, it had 20,190,964 subscribers. In addition, the company designs, establishes specifications, sources or specifies parts and components, and manages various aspects of the logistics and production of satellite radios; licenses its technology to various electronics manufacturers to develop, manufacture, and distribute radios under various brands; and imports radios distri buted through its Websites. The company?s satellite radios are primarily distributed through automakers, retailers, and its Websites. Further, it provides music services for commercial establishments; a satellite television service to offer music channels as part of certain programming packages on the DISH Network satellite television service; music and comedy channels to mobile phone users through mobile phone carriers; Backseat TV, a service offering television content designed primarily for children in the backseat of vehicles; Travel Link, a suite of data services that include graphical weather, fuel prices, sports schedules and scores, and movie listings; and real-time traffic and weather services. The company was formerly known as Sirius Satellite Radio Inc. and changed its name to Sirius XM Radio Inc. in August 2008. Sirius XM Radio Inc. was founded in 1990 and is headquartered in New York, New York.
Advisors' Opinion:- [By Chuck Carlson]
SIRI has seen steady gains since September 2010, and the company continues to put out new and exciting channels for its satellite radio such as the latest one, Studio 54.Regardless, some investors hav e expressed caution regarding the company. This article, also from Seeking Alpha, brings up some great points that are certainly worth mentioning. In many ways, Sirius XM has not taken full advantage of traditional Internet or the mobile market.Even some users of the company’s technology readily admit that its Internet and mobile services aren’t great. Sirius’s use of advertising and reaching out to certain demographics has also been lacking. Despite all these important points though, the fact remains that competition in the radio industry is quite weak. Net income for Sirius’s most serious (no pun intended) competitor Pandora (P) has been negative for 2 straight quarters now. SIRI also beats P in some other statistics. Gross margin and operating margin for SIRI are both about 20 percentage points higher. Additionally, price to sale ratio for P is a whopping 11.69, while SIRI’s is a much more reasonable 2.39. While more traditional radio broadcasters like Cumuls Media (CMLS) and Westwood One (WWON) have the best price to sale ratios (0.43 and 0.37 respectively), it is quite clear that these companies are a dying breed.
- [By Michael Brush]
Howard Stern lemmings piled into Sirius stock years ago when the shock jock moved his circus to satellite radio. Many lost almost all their money, as the company's stock fell under $1 from above $8.
But with a 2008 buyout of XM Radio and a bankruptcy scare under its belt, Sirius XM Radio (SIRI) is now a dominant force on the comeback trail.
Skeptics believe iPods and free Web radio services like Pandora will jam the signal at Sirius, which charges $12.95 a month. But satellite radio offers content that listeners can't find elsewhere on the radio -- not only Stern, but also Martha Stewart, Oprah Winfrey, Jamie Foxx, Barbara Walters and a Playboy channel, to name a few.
And recent trends confirm that drivers are willing to pay for that content. Sirius XM Radio's subscriber base grew last year by 8%, to 20.2 million. That helped drive revenue up 14%, to $2.82 billion. "It's kind of like the original cable TV, when everyone thought people wouldn't pay for TV because it's free," says Robert Routh, a media analyst at Phoenix Partners. "Sirius XM Radio has lot of stuff you can't get elsewhere." The reason: While terrestrial radio companies lack the funds to buy the big talent, Sirius XM Radio can buy wh atever it wants to fill its 135 channels, says John Tinker, an analyst with Maxim Group.
Two other keys to growth: Sirius XM Radio is available for free for a few months in 60% of all new cars. As car sales rise in an improving economy, subscriber growth should increase. A Sirius 2.0 upgrade and a possible rate increase later this year will also drive gains. All-important cash flow could hit $1 billion a year by 2015, predicts Morgan Stanley analyst David Gober. He says Sirius XM Radio will be announcing dividends and share buybacks -- music to investors' ears
- [By Tom Bishop]
Sirius XM Radio Inc. (SIRI) Sirius has a market cap of $6.86 billion with a price-to- earnings ratio of 44.63. The stock has traded in a 52-week range of $1.10 to $2.44. The stock is currently trading around $1.80. On August 2nd, the company reported revenue of $744 million compared with revenue of $700 million in the second quarter of 2010. Second quarter net income was $173 million compared with net income of $15.3 million in the second quarter of 2010.
One of Sirius XM’s competitors is Westwood One Inc. (WWON). Westwood One is currently trading around $4 with a market cap of $89.73 million and a negative price-to -earnings ratio.
Sirius XM has been in an upward trend. In the second quarter, the company increased net income by 1,013% from the second quarter of 2010. In 2010, the company announced that it had increased its annual net income by $572.2 million, when it reported its first ever profit of $43.1 million. The company has completed building its infrastructure and should be able to reduce costs. The company recently reaffirmed its guidance of 10% revenue growth and free cash growth of 75%. Sirius XM has a lot of debt but should be able to pay down debt with the additional cash. Investors like what they see in Sirius and have bid up the stock price by 62% over the last 52 weeks. Additionally, we don't see Pandora (P) as a serious threat. I rate Sirius XM Radio Inc. a buy.
- [By Michael Brush]
Howard Stern lemmings piled into Sirius stock years ago when the shock jock moved his circus to satellite radio. Many lost almost all their money, as the company's stock fell under $1 from above $8.
But with a 2008 buyout of XM Radio and a bankruptcy scare under its belt, Sirius XM Radio (SIRI) is now a dominant force on the comeback trail.
Skeptics believe iPods and free Web radio services like Pandora will jam the signal at Sirius, which charges $12.95 a month. But satellite radio offers content that listeners can't find elsewhere on the radio -- not only Stern, but also Martha Stewart, Oprah Winfrey, Jamie Foxx, Barbara Walters and a Playboy channel, to name a few.
And recent trends confirm that drivers are willing to pay for that content. Sirius XM Radio's subscriber base grew last year by 8%, to 20.2 million. That helped drive revenue up 14%, to $2.82 billion. "It's kind of like the original cable TV, when everyone thought people wouldn't pay for TV because it's free," says Robert Routh, a media analyst at Phoenix Partners. "Sirius XM Radio has lot of stuff you can't get elsewhere." The reason: While terrestrial radio companies lack the funds to buy the big talent, Sirius XM Radio can buy whatever it wants to fill its 135 channels, says John Tinker, an analyst with Maxim Group.
Two other keys to growth: Sirius XM Radio is available for free for a few months in 60% of all new cars. As car sales rise in an improving economy, subscriber growth should increase. A Sirius 2.0 upgrade and a possible rate increase later this year will also drive gains. All-important cash flow could hit $1 billion a year by 2015, predicts Morgan Stanley analyst David Gober. He says Sirius XM Radio will be announcing dividends and share buybacks -- music to investors' ears.
Top 5 Penny Companies To Invest In 2014: Nicholas Financial Inc.(NICK)
Nicholas Financial, Inc., through its subsidiaries, operates as a specialized consumer finance company. The company engages in acquiring and servicing contracts for purchases of new and used automobiles and light trucks. It also makes direct loans and sells consumer-finance related products. In addition, the company engages in developing, marketing, supporting, and updating industry-specific computer application software for small businesses located primarily in the Southeast United States. As of April 5, 2011, it operated 56 branch locations in 14 Southeastern and Midwestern states. The company was founded in 1986 and is headquartered in Clearwater, Florida.
Top 5 Up And Coming Companies To Own For 2014: Torch Energy Royalty Trust(TRU)
Torch Energy Royalty Trust, a grantor trust, holds net profits interests, to receive payments from the working interest owners. Its working interest owners include Torch Royalty Company, Torch E&P Company, Samson Lone Star Limited Partnership, and Constellation Energy Partners LLC. The trust is entitled to receive 95% of the net proceeds attributable to oil and natural gas produced and sold from wells on the underlying properties, including Chalkley Field in Louisiana; the Robinson?s Bend Field in the Black Warrior Basin in Alabama; Cotton Valley Fields in Texas; and Austin Chalk Fields in central Texas. Torch Energy Royalty Trust was founded in 1993 and is based in Wilmington, Delaware.
Top 5 Penny Companies To Invest In 2014: Security National Financial Corporation(SNFCA)
Security National Financial Corporation, together wit its subsidiaries, provides various insurance and annuity products in the United States. It operates in three segments: Life Insurance, Cemetery and Mortuary, and Mortgage Loans. The Life Insurance segment engages in selling and servicing certain lines of life insurance, annuity products, and accident and health insurance products. This segment also involves in funeral plans and interest-sensitive life insurance, as well as other traditional life and accident, and health insurance products. It sells its products through direct agents, brokers, and independent licensed agents. The Cemetery and Mortuary segment offers various products that include grave spaces, interment vaults, mausoleum crypts and niches, markers, caskets, flowers, and other related products. This segment also provides services, such as professional services of funeral directors, opening and closing of graves, use of chapels and viewing rooms, and use of automobiles and clothing. It sells its products and services through sales representatives. As of December 31, 2009, the segment owned 6 cemeteries and 10 mortuaries. The Mortgage Loans segment originates and underwrites residential and commercial loans for new construction, existing homes, and real estate projects primarily in Arizona, California, Florida, Hawaii, Indiana, Kansas, Oklahoma, Oregon, Texas, Utah, and Washington. The company was founded in 1965 and is headquartered in Salt Lake City, Utah.
Top 5 Penny Companies To Invest In 2014: Horizon Lines Inc.(HRZ)
Horizon Lines, Inc., through its subsidiaries, provides container shipping and integrated logistics services. It ships a range of consumer and industrial items, such as refrigerated and non-refrigerated foodstuffs, household goods, auto parts, building materials, and other materials used in manufacturing. The company offers container shipping services to ports within the continental United States, Puerto Rico, Alaska, Hawaii, Guam, the U.S. Virgin Islands, and Micronesia. Its integrated logistics services comprise rail, truck brokerage, warehousing, distribution, expedited logistics, and non-vessel operating common carrier operations. Horizon Lines, Inc. also offers terminal services. The company operates terminals in Alaska, Hawaii, and Puerto Rico; contracts for terminal services in seven ports in the continental United States; and the ports in Guam, Yantian, and Xiamen, China, as well as Kaohsiung, Taiwan. In addition, it offers inland transportation services. As of Dec ember 20, 2009, the company owned or leased approximately 20 vessels and 18,500 cargo containers. Horizon Lines, Inc. serves consumer and industrial products companies, as well as various agencies of the U.S. government, including the Department of Defense and the U.S. Postal Service. The company was founded in 1956 and is based in Charlotte, North Carolina.
Advisors' Opinion:- [By Hutchinson]
Horizon Lines (NYSE: HRZ) is the largest oceangoing shipping company in the United States with a dominant market position along protected shipping lanes. One look at the steady resurgence in shipping demand, coupled with the company’s improving financials, and it seems the worst is behind them — making now the perfect time to scoop up this stock at a discount.
HRZ is up almost 30% since September, and I expect it to continue moving higher. Recent data show more goods are being manufactured, and they need to be shipped. Horizon will be one of the biggest beneficiaries.
Buy HRZ on pullbacks under $5.
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