5 Reasons to Own Sirius XM Radio (SIRI)

Reason #1: SIRI’s debt crisis has passed

It is incredibly expensive to launch a satellite radio business. In order to fund the cost of satellites and the acquisition
of radio spectrum, Sirius borrowed billions of dollars. After a period of several years, the company planned to pay down that
debt with cash flow or refinance the debt if more time was needed.

But not in this environment. The due date on SIRI’s debt directly coincided with the greatest financial collapse since the Great
Depression. It is no wonder that bankruptcy was considered given SIRI’s inability to refund debt.

But here’s the key: Sirius was in its best operating position and is now able to operate as a monopoly. Once Liberty Media stepped
up to the plate as a lender, Sirius gained time for the credit markets to heal.

Though we are not out of the woods, speculative
lending will eventually return. When it does, SIRI is a credit worth betting on, given its monopolistic power and attractive cash
flow potential. To the extent the debt pressure lessens, equity will increase in value.

NEXT: Reason #2: Economic recovery will help Sirius