Quote:
Originally posted by lilbigblue
I have been tracking both XMSR and SIRI for nearly 6 months now. The biggest difference between the two companies is the following:
XMSR: over 1 million subscribers
SIRI: 200,000 subscribers
In the end, subscribers will drive the revenue up. Since Sirius has very limited commercials and advertisements, they are not generating the same kind of revenue that traditional radio stations generate. That is why these satellite radio firms must charge a subscription fee.
From a consumer standpoint, I have heard both goods and bads about XMSR and SIRI. Sirius is a few dollars more per month, but less advertisements and i hear the programming is a bit better. XMSR, on the other hand, has better reception and less dropped signals.
If you look at the companies' financials, you will notice the following:
XMSR as of Q3:
Total Cash: 456.63M
Total Debt: 773.4M
Changes in AR: -7.1M
Changes in Liabilities: 40.8M
Change in Cash and Cash Equiv: has declined the past 2 Quarters
SIRI as of Q3:
Total Cash: 479.11M
Total Debt: 259.69M
Changes in AR: 16.9M
Changes in Liabilities: -5.2M
Change in Cash and Cash Equiv: Declined in the past Quarter
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I wonder 2 things about your analysis.
1. What was the long term trend in the AR's for each company. While XM does have a decreasing AR and SIRI an increasing, this could point out, if a trend, that SIRI is having problems collecting on accounts and is digging itself in further. As a % of sales, their AR could indicate these problems.
2. Changes in liabilities does not inherently point out problems. First off, the SIRI decline in lia might indicate that the company has not found an optimal debt/equity mix, again, it would be interesting to look at the trends in this category.
All in all, comparison of absolute numbers is almost worthless. Common sized statements and % trends quarter to quarter and year to year show a better picture. Since these are the only two companies to compare it is also harder to determine what a good industry average should be.
My last question would be what type of investor you are? What is the average hold time for a stock. This is more of a curious question.
LK