Buyback Bets in Media

09/18/2015 8:00 am EST


David Fried

Editor, The Buyback Letter

David Fried is a long-standing expert in selecting stocks that are actively involved in buybacks and repurchase programs. Here, the editor of The Buyback Letter highlights two media stocks that have been added to his model portfolio.

Sirius XM Holdings (SIRI)

We bought satellite radio giant Sirius XM Holdings in April 2014 and held it for more than a year. It has now risen to the top in our filters again.

It is the world’s largest pay-radio service (a market leader in car radio service), with a record 28.4 million subscribers.

Although naysayers like to call it "transitional technology" and suggest it may be vulnerable to mobile apps, premium radio has become a key platform for commuters and other drivers.

In addition, the company has been acquiring radio broadcast rights to major music festivals (Coachella, Bonnaroo, the Grateful Dead farewell tour) and exclusive concerts with Pitbull and James Taylor.

Sirius XM recently boosted its guidance for subscribers, revenue, adjusted EBITDA, and free cash flow for all of 2015.

During Q2, it repurchased 144 million shares of stock. So far this year, it spent about $1.3 billion to repurchase 338 million shares. Overall, SIRI has reduced shares outstanding by 10.24% in the past 12 months.

TiVo Inc. (TIVO)

We've bought TiVo four times in the last two years; this global leader in the advanced TV entertainment market has risen to the top of our filters again.

If you watch TV, you probably know TiVo. It developed the first commercially available DVR, so every time you pause a live TV program, skip past the commercials, or automatically record a series, you've got TiVo to thank.

TiVo now offers the TiVo service and TiVo DVRs directly to consumers online and through third-party retailers. TiVo also distributes its technology and services through cable, satellite, and broadcasting companies.

Fiscal Q1 showed it had better than expected sales and profit. It earned 8 cents a share, up 14% year over year, on sales of $92.4 million, up 7%.

TiVo ended Q1 with 5.8 million subscribers, up 27%. Meanwhile, the company has reduced shares outstanding by 20.89% in the past 12 months.

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