During the first quarter John Griffin (Trades, Portfolio) sold out his stake in Sirius XM Holdings Inc. (SIRI, Financial).
Sirius XM Radio provides and broadcasts commercial-free music, sports, news, talk, entertainment, traffic and weather channels in the U.S. for a subscription fee through its proprietary satellite radio systems. Sirius XM Radio has agreements with every major automaker to offer satellite radios in its vehicles according to its most recent 10-K filing. As of Dec. 31, 2015 Sirius XM Radio had approximately 29.6 million subscribers in the U.S. alone.
Sirius XM Radio has a market cap of $19.68 billion, an enterprise value of $25.3 billion and a P/E ratio of 36.09.
According to GuruFocus Sirius XM Radio has a 4/10 financial strength rating with a 0.02 cash to debt ratio, which ranks Sirius XM Radio lower than 97% of the companies in the Global Broadcasting - Radio industry. Over the previous five years, Sirius XM Radio has doubled its value in market price. It's possible that Griffin decided to sell out his stake in Sirius XM Radio because the company is close to a five-year high in price.
Griffin also may have seen Sirius XM Radio as a high variance holding because it has issued $3.8 billion of new debt over the previous three years. Sirius XM Radio is also facing an increased amount competition from some of the most powerful companies in the world that have the differentiation advantage of offering services for free. These companies include: Apple (AAPL), Google (Play), Pandora (P) and iHeartRadio.
Below is a Peter Lynch Chart for Sirius XM Radio.
It's possible that Griffin sold out his position in Sirius XM Radio because the company is close to a five-year high in price. Griffin may have also been concerned with the fact that the company is continuing to issue new debt while facing future competition from some of the most powerful companies on the planet that offer similar services free of charge.
Griffin is the president of Blue Ridge Capital, an investment partnership that he founded in 1996. Prior to founding Blue Ridge Capital, Griffin was president of Tiger Management where he was able to learn and gain confidence in his investment ability under the guidance of legendary guru Julian Robertson. Griffin received his MBA from Stanford University's Graduate School of Business and his B.S. in finance from the University of Virginia’s McIntire School of Commerce.
Cheers to your investment success.
Disclosure:Ă‚ Author does not currently own any shares of this company.
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