Tomahawk, WI 11/15/2013 (BasicsMedia) – Sirius XM Radio Inc (NASDAQ:SIRI) at a market cap of $23.68 billion has had a largely successful run this year. Investors should note that so far, SIRI is the only commercial satellite-radio service provider. The company was formed out of the merger of Satellite Radio and XM Satellite Radio some five years ago. The force which resulted has given the combined company Sirius XM Radio Inc (NASDAQ:SIRI) a huge subscriber base which totals more than 25 million according the most recent data.

The SIRI model of business is just superb and this helps the company in minting billions of dollars annually. The company’s 25 million subscribers pay about $10 per month for the satellite radio services. SIRI streams commercial-free and exclusive radio channels to its subscribers. SIRI also includes some other syndicated third-party stations just to make sure its clients get the best value for their $10 per month subscription.

 

Car connection business is new revenue frontier for SIRI

Lately, Sirius XM Radio Inc (NASDAQ:SIRI) has been making spirited foray into connected cars market, connecting new car owners to its satellite radio service. This market segment has been growing exponentially. So far, SIRI boats about 70% of new car connections in North America. About four years ago, Sirius XM had only 33% in new car connection market share.  Due to this materially big market share in the new car market, the $23.68 billion capped company has been able to make remarkable capital investment, the latest being a new satellite installation.

Apart from new cars market, Sirius XM Radio Inc (NASDAQ:SIRI) is also seeing a lucrative market in the used car market. So far, SIRI has added more than 10,000 used car dealers to its network. Making second-hand car buyers its subscribers is something that this company is taking very seriously and its ready to invest big in this segment having seen just how it can be lucrative.

The reason used car market is attractive is that the sale of cars in this segment is already high and is still expect to grow in the coming years. That Sirius XM Radio Inc (NASDAQ:SIRI) offers its exclusive services for just $10 per month makes its deal really attractive to car owners. Having increased its market share from 33% in 2007 to 70% in 2013 is clear indication that the company’s growth has been impressive.

SIRI’s earnings and stock performance

There is something that is favoring Sirius XM Radio Inc (NASDAQ:SIRI)’s stock and it has to do with how the market is viewing Pandora Media Inc (NYSE:P). Pandora provides ad supported internet radio service. When it was reported that Pandora was holding up well against the market competition, especially against Apple’s iTunes Radio and that Pandora’s ad revenue has been able to witness significant growth, SIRI’s investors reacted positively to this news, sending its share up on the browser by over 7% last week.

The thinking is that if Pandora is able to attract more advertises for its internet radio services, then SIRI can even attract more than that. So this has created investor appetite for SIRI stock. On to the earnings, Sirius XM Radio Inc (NASDAQ:SIRI) has seen its revenue up 10% year to date, topping the industry average of 8.1%. Its operating cash flow has also increased significantly over the same time frame. So has been its net income. So actually this is a stock that is soaring today and has the potential to continue the growth in the coming years.

DISCLAIMER: This content is neither an offer nor recommendation to buy or sell any security. We hold no investment licenses and are thus neither licensed nor qualified to provide investment advice. The content in this report or email is not provided to any individual with a view toward their individual circumstances. While all information is believed to be reliable, it is not guaranteed by us to be accurate. Individuals should assume that all information contained in our newsletter is not trustworthy unless verified by their own independent research. Also, because events and circumstances frequently do not occur as expected, there will likely be differences between the any predictions and actual results. Always consult a real licensed investment professional before making any investment decision. Be extremely careful, investing in securities carries a high degree of risk; you may likely lose some or all of the investment.