Sirius XM-Warren Buffett Isn't Buying Many Stocks These Days – But He Can't Get Enough of This One

Core Viewpoint - Warren Buffett's Berkshire Hathaway has been a net seller of stocks, resulting in a cash stockpile of $325 billion, the largest in its history [1] - Despite selling stocks, Berkshire has increased its position in SiriusXM, now owning 35.4% of the company [2] Company Overview - SiriusXM is a leader in the satellite radio industry, operating its own subscription service and owning the Pandora platform [3] Recent Performance - SiriusXM's stock has declined by approximately 50% over the past year due to stagnant revenue and a shrinking subscriber base, which is about 5% smaller than its peak in 2019 [4] Growth Potential - SiriusXM holds a legal monopoly in the satellite radio sector, particularly in new vehicle installations, which could benefit from falling interest rates and increased new car sales [5] - The company aims to add 10 million new subscribers and increase free cash flow from an estimated$ 1.15 billion in 2025 to $1.5 billion by 2027 [6] Valuation - SiriusXM is considered a cheap stock, trading at about 8.5 times forward earnings estimates and less than six times the management's 2027 free cash flow target [7] Capital Return - SiriusXM has a strong track record of returning capital to shareholders through dividends and share repurchases, currently yielding about 4.1% with a significant increase in quarterly dividends over the past three years [8] Investment Rationale - The investment in SiriusXM by Berkshire Hathaway may be driven by the potential risk-reward profile, despite execution risks associated with achieving growth targets [10]