Warren Buffett has been offloading stocks at an unprecedented rate, with Berkshire Hathaway (NYSE: BRK.A) (NYSE: BRK.B) now sitting on a massive $325 billion cash reserve—the largest in the company’s history. While this signals that Buffett isn’t finding many bargains in today’s market, there’s one stock he keeps buying: SiriusXM (NASDAQ: SIRI).
Berkshire now owns a staggering 35.4% stake in the satellite radio giant, a move that has left many investors wondering: What does Buffett see in SiriusXM?
SiriusXM’s Stock Has Tanked—For Good Reason?
SiriusXM has lost nearly 50% of its value over the past year, and on the surface, the decline makes sense.
- Revenue has been flat for four years and is expected to decline in 2025.
- Subscriber count is down 5% from its 2019 peak, raising concerns that SiriusXM’s best days are behind it.
But for those willing to dig deeper, SiriusXM has some hidden strengths that could make it a major comeback story.
Why SiriusXM Could Be a Big Winner
While traditional media companies are struggling, SiriusXM holds a virtual monopoly on satellite radio—especially in new vehicles, which is a critical entry point for new subscribers.
With interest rates expected to fall, the auto market could surge, providing SiriusXM with millions of new potential customers. To capitalize on this, the company has launched a three-year dealer-paid subscription model, which is gaining traction.
And let’s not forget advertising. SiriusXM is making big moves in podcasting and ad-supported streaming, positioning itself for long-term revenue growth.
The company’s growth plan aims to add 10 million new subscribers and increase free cash flow from $1.15 billion (2025 estimate) to $1.5 billion in 2027.
SiriusXM: An Undervalued Market Leader
SiriusXM is cheap—very cheap.
- Trades at just 8.5x forward earnings, far lower than most media peers.
- Management expects $200 million in cost savings in 2025, on top of $350 million in cuts already made.
- Generous capital return program, with a 4.1% dividend yield and aggressive stock buybacks ($1.166 billion authorization).
This is a highly profitable company that, if it executes on its growth strategy, could be one of the best bargains in the market today.
Final Take: Buffett’s Bet on SiriusXM Makes Sense
Whether Buffett himself or his portfolio managers (Todd Combs and Ted Weschler) are behind the SiriusXM purchases, the logic is clear:
- It’s a market leader in a niche space with high barriers to entry.
- It’s massively undervalued relative to its long-term cash flow potential.
- It offers significant upside if management executes correctly.
While execution risk remains, SiriusXM’s ability to cut costs, attract new subscribers, and expand ad revenue could make it a big winner in the coming years.
Buffett isn’t one to bet on losers—and SiriusXM just might be one of the smartest risk-reward investments in Berkshire’s portfolio today.
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