Warren Buffett says he never tried to make money on the stock market.
That might sound a little strange coming from the chairman and chief executive of Berkshire Hathaway (BRK.A) , who according to the Bloomberg Billionaire Index is the world’s ninth richest man
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But we’ll let the Oracle of Omaha explain what he means.
“I buy on the assumption that they could close the market the next day and not reopen it for five years,” said Buffett, who is often considered the best investor in modern times.
Okay, so clearly this man likes to play the long game. And it seems to be paying off.
The investment group (BRK.B) directly owns well-known and diverse brands including Geico insurance, the railway BNSF, Dairy Queen ice cream shops, Fruit of the Loom apparel, Duracell batteries, Acme Brick, and See’s Candies.
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And according to recent regulatory filings, Berkshire Hathaway increased its holding in Sirius XM Holdings (SIRI) to 35.4%.
The group acquired around 2.3 million shares of the satellite and online radio company for about $54 million in a series of transactions from Jan. 30 to Feb. 3.
Warren Buffett is often considered the best investor in modern times. Berkshire Hathaway recently acquired shares in SiriusXM.
Daniel Zuchnik/Getty Images
Sirius XM CEO: Company had strong Q4
As of Feb. 3, Berkshire Hathaway’s subsidiaries own more than 103.79 million SiriusXM shares and Berkshire’s pension plans own 15.98 million shares.
Berkshire has been steadily increasing its stake in SiriusXM, as majority owner Liberty Media decided to merge its tracking stock with Sirius in the second half of 2024.
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Berkshire Hathaway began investing in Liberty Media in 2016.
Shares of Sirius XM, formed when Sirius Satellite Radio and XM Satellite Radio merged in 2008, closed Feb. 4 at $24.62, up 2.6%.
The stock has climbed 7.3% this year but is down almost 53% from 12 months ago.
The company reported fourth-quarter results on Jan. 30, earning 83 cents a share, up from 67 cents a year earlier and beating estimates of 64 cents a share.
Revenue totaled $2.2 billion, compared with $2.3 billion a year earlier. Wall Street was looking for $2.17 billion.
“SiriusXM had a strong fourth quarter to cap off 2024, entering 2025 with a focused strategy, clear goals, and defined path to addressing both the challenges and opportunities ahead,” Chief Executive Jennifer Witz said during the company’s earnings call.
SiriusXM added to Tesla, Rivian models
Witz said the launch of SiriusXM’s service in Tesla (TSLA) and Rivian (RIVN) models in December, using the company’s 360L audio platform and a streaming-only implementation, “allowed us to quickly scale to over 2 million vehicles already on the road.”
“In 2025, we’ll be making adjustments that will both allow for a more seamless customer experience and improve the overall health of our business in the long term,” she said.
Barrington analyst Patrick Sholl pared the investment firm’s price target on Sirius XM to $28 from $30 and reiterated an outperform rating on the shares.
The company’s leverage remains manageable, after moving higher when the Liberty transaction closed, the analyst said.
Sholl said Sirius XM’s “strong” cash flow could help the company reduce leverage and enable greater return of capital to holders.
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Matthew Dolgin, a senior equity analyst for Morningstar, said Sirius XM remains in transition as it rolls out lower-priced and streaming subscription tiers.
The company has an uphill climb to return Sirius XM or Pandora to subscriber growth, the analyst said, but off-platform advertising is a bright spot.
Dolgin maintained his fair-value estimate of $30 a share for the company.
“We don’t forecast Sirius XM to ever grow, but the firm continues to generate more than $1 billion annually in free cash flow, and capital spending should decline over the next few years as the firm’s recent investment cycle winds down,” the analyst wrote on Feb. 4.
Dolgin said prices for the traditional Sirius XM plan are still too high for the current era of streaming music platforms.
The analyst says subscriber numbers will stabilize with continually declining average revenue per user. ARPU measures how much money a company takes in from each user over a specific period.
“So we expect Sirius XM revenue, which comprises 75% of the company’s total, will continue shrinking,” he said.
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