Tomahawk, WI 12/17/2013 (BasicsMedia) – Some investors are still taking time to see if Sirius XM Holdings Inc. (NASDAQ:SIRI) is doing serious business with its satellite radio service. A decade ago, XM and Sirius took on each other fiercely as they made content acquisition costs too high to the point that no one was enjoying the business. After coming together in a merger, though, a lot has changed for the good.

For the past 10 years, it was natural for investors not to think of satellite radio service as a worthy investment.

There are several factors which explain why Sirius XM Holdings Inc. (NASDAQ:SIRI) is a future stock. But before going on to unleash these factors, it is important to note that at around $3.50 per share, the stock is ripe for uptake because in the coming months, it is looking poised for a rally to the region of $4 and $5. In fact, some analysts have even raised the price target on the stock to $6 in the next few months.

Connected Cars

Sirius XM Holdings Inc (NASDAQ:SIRI) is investing big in connected vehicle segment. It recently acquired Connected Vehicle from Agero for about $2.5 billion. This acquisition is expected to expand the company’s market share in in-car system.

The company is targeting new and used cars to connect to its radio service system. Its deal with U.S. automakers has seen about 50 million newly built cars being installed with SIRI hardware. As the auto industry is expected to grow, SIRI hopes to saturate the industry.

As for used cars, the company is already working with thousands of used-car dealers to install its hardware in the cars and allowing buyers a free trial service for a limited duration.

For connected cars, Sirius XM Holdings Inc (NASDAQ:SIRI) charges a fixed rate between $10 and $12 per month. The services include exclusive radio talks, news, entertainment and more. Unlike competitors, SIRI’s services are devoid of commercials, thus giving listeners a better experience.

By partnering with automakers and car dealers, Sirius XM Holdings Inc. (NASDAQ:SIRI) has tapped a goldmine that is expected to generate increasing stream of revenue for the company.

Large Subscriber-base

Sirius XM Holdings Inc (NASDAQ:SIRI) is the most popular radio service outside the traditional radio stations with respect to subscriber-base. The company boasts nearly 26 million subscribers and the number is growing. Basically, the company controls about 8 percent of the U.S. listener base. Even with this already huge subscriber-base, there are still more opportunities to add more subscribers.

Solid grounds

Sirius XM Holdings Inc (NASDAQ:SIRI) is now returning profits in its operations after a decade of losses and strained business environment. The company is expected to buy a significant number of its stock next year which will result in improved earnings per share. It has also recently installed a new satellite which means it will not be having big capital expenditure in the next 2 – 3 years. Essentially, the company will be having free cash to return to investors in terms of shares buyback and dividend.

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