RBC: Sirius Valuation Difficult to Justify (SIRI, CMLS, ETM, SGA, EMMS)

Tickerspy’s Radio Index

RADIO INVESTING IDEAS

• Popular long ideas: SIRI, P, ETM
• Popular short ideas: SIRI, P, SGA
• Top dividend plays: CJREF
• Pro favorites: SIRI, CMLS, P

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RADIO COVERAGE

These firms own and operate radio stations or provide other radio services

• Analysts Tune Into Pandora, But Competition Rises (P, SIRI, CMLS, ETM, EMMS, SGA)
• Pandora Hit On Multiple Fronts (P, SIRI, CMLS, ETM, CJREF)
• Pandora Slumps On News Of Heightened Competition (P, SIRI, CJREF, EMMS, ETM, SGA)

RADIO CHART

RADIO METRICS

Avg. Market Cap:	$4.0B
Avg. P/E Ratio:	16.7
Avg. Div Yield:	0.6%

Trader favorite Sirius XM Radio (SIRI) slipped by -1% on Thursday after RBC Capital Markets said that the stock’s valuation is difficult to justify. The analyst noted that the firm’s third-quarter net subscriber adds were better than expected, and it is pleased to see the company start to address longer-term liquidity issues, but a 17x 2011 enterprise value to EBITDA multiple is too rich to be bullish on the stock.

Elsewhere in the analyst space, BGB Securities took Sirius to Hold from Buy with a $1.50 price target, citing earnings and valuation. The target represents a 7% premium to Wednesday’s closing value.

At the end of Q2, the seven 13F-filing asset managers counted Sirius among their top-15 U.S.-listed equity holdings, ranking the stock first in Pro popularity among Radio Stocks Index components.

Over the last month, Sirius has gained 32%, trailing only Cumulus Media (CMLS) in the radio sector. Meanwhile, Entercom Communications (ETM) and Saga Communications (SGA) are ahead by 19% and 6% respectively for the period, as Emmis Communications (EMMS) hangs in the red by -30% after letting a buyout offer expire.

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Tags: CMLS, EMMS, ETM, SGA, SIRI