Keith, Tom:
Yahoo Finance's In Play excerpted the Barron's piece:
7:43 am CT XM Satellite and Sirius profiled in Barron's (XMSR) 3.78:
Article gives a description of both companies' offerings, but is more positive on XM Satellite. Believes for investors who can tolerate risk, XMSR "looks as though it's worth a bet." With 347,000 subscribers at yr-end, XM has a major head start on Sirius Satellite (SIRI), which had just under 30,000 subs. XMSR also boasts strong relationships with General Motors and Honda, which hold equity stakes of 19% and 8%, respectively, and are rapidly rolling out XM as a feature on new vehicles. XM expects to have more than 1 mln subs by yr-end vs about 300,000 for SIRI. According to article, satellite-radio fans believe it could become this decade's hot new consumer-electronics product, ultimately boasting 30 mln subs; each co needs 2-3 mln subs to break-even. Article speculates that if XM hits 10 mln subs in 2007, it could earn $500 mln or $1.50 a share. "That could support a $30 to $40 stock."
XMSR isn't in my portfolio, but its been on my radar ever since Keith started to 'hoot-n-holler' about it over a year ago.
With a potential 8 to 10 bagger in 4-5 years, this could be a fun (and profitable) AIM play. My instincts (lousy as they are) tell me to 'tilt' the Safe for a long term uptrend (lower on the Buy side, higher on the Sell side), like maybe 5/15 or even 0/20, with a Minimum of 5% to capture as many opportunities as possible. Leveraging this a little further with those settings and Low Down AIM; one could allocate $4800 total ($2500 of which would be cash reserve), and have a starting PC of 10000.
On the other hand, since XMSR doesn't meet even minimal AIM selection criteria, one might just want to buy 1300 shares for the $4800, sit on it and hold on. If Barrons is correct, it will be worth $40000 plus in less than 4 years.
Shoot! Now I gotta find some way to carve out some cash for one of those 2 options.
Regards, Steve
Best Regards, Steve (The Grabber)
AI
