LSXMK
The Liberty SiriusXM Group
TMT
11/12/2018
Presented
| Date | 11/05/2018 |
| Price | $41.98 |
| Market Cap | $13.88B |
| Ent Value | $27.97B |
| P/E Ratio | 12.68x |
| Book Value | $32.78 |
| Div Yield | 0% |
| Shares O/S | 330.56M |
| Ave Daily Vol | 750,196 |
| Short Int | 1.01% |
Current
| Price | $22.29 |
| Market Cap | $7.28B |
| The Liberty SiriusXM Group, through its subsidiary Sirius XM Holdings Inc., transmits music, sports, entertainment, comedy, talk, news, traffic, and weather channels in the United States and Canada. The company also provides infotainment services; and Sirius XM on Demand over its Internet radio service through applications for mobile and home devices, and other consumer electronic equipment. In addition, it offers connected vehicle services; and Travel Link, a suite of data services that include graphical weather, fuel prices, sports schedules and scores, and movie listings. Further, the company engages in the direct sale of satellite radios and accessories. It distributes its satellite radios through automakers, as well as through its retailers and Website; and satellite radio services to satellite radios. As of December 31, 2017, it had approximately 32.7 million subscribers. The company is based in Englewood, Colorado. The Liberty SiriusXM Group is a subsidiary of Liberty Media Corporation. |
Publicly traded companies mentioned herein: Amazon.com Inc (AMZN, Apple Inc (AAPL), Liberty Media Corp-Liberty Braves (BATRK), Liberty Media Corp-Liberty Formula One (FWONK), Liberty Media Corp-Liberty SiriusXM (LSXMK; LSXMA), Live Nation Entertainment Inc (LYV), Pandora Media Inc (P), Qurate Retail Group (QRTEA/B), Sirius XM Holdings Inc (SIRI), Spotify Technology SA (SPOT)
Highlights
The presenter is long Liberty Media Corp-Liberty SiriusXM via LSXMK (LSXMA, the other tracking stock, is less liquid but has voting rights). Liberty Media Corp is obviously controlled by Chairman John Malone, and Greg Maffei serves as President and CEO of the family of companies, which includes SiriusXM (SIRI), Formula One Group (F1), the Atlanta Braves, and an interest in Live Nation Entertainment (LYV). While the tracking stocks could be reorganized at any time, based on Liberty’s discretion, the integrity of the trackers has been maintained, and there remains optionality around a conversion to a C corp that owns/controls (e.g., Qurate). At ~$42, the risk/reward with LSXMK is favorable. It presently trades at a 29% NAV discount to the value of what it tracks (a 71% stake in SIRI), and making “reasonable” balance sheet adjustments exacerbates the valuation disconnect (i.e., investors are paying just 8.5x EBITDA for a quasi-monopoly business that should grow its top line and EBITDA by 5% and 7%, respectively; SIRI normally trades at a mid-teens multiple to EBITDA). Additionally, the Pandora deal is potentially excellent for SIRI.
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