Forbes: XM and Sirius Could Get A Boost Before Year End

Potential Year-End Rally Seen For XM, Sirius
R.M. Schneiderman, 11.03.06, 3:51 PM ET, Forbes, Market Scan

It hasn't been a good year for satellite radio stocks as slowing retail growth and unimpressive new subscriber additions have prompted shareholders to reign in their investments.
Shares of XM Satellite Radio are down 58% year to date, while rival Sirius Satellite Radio has seen its stock drop by 44% in 2006.
Both stocks could get a boost before the end of the year, according to a research report released by American Technology Research on Friday.
"Both stocks have been exceptionally poor performers," wrote AmTech analyst Rob Sanderson. "While we do not see a turn in weak fundamentals in the near-term, we think both stocks may be candidates for a year-end bounce."
The reason? Sanderson said as fund managers try and unload their worst performing stocks to offset capital gains taxes, poor-performing stocks historically see solid gains in the following months. The fiscal year for funds ended on Oct. 31.
"Investors are bottom fishing," he said in a telephone interview. "A lot of times you see a bit of a rally at the end of the year."
Sanderson said XM is likely to see a bigger upward bounce compared with Sirius since its share price has declined considerably more.
For a long-term turnaround, however, the analyst said both companies need to witness a re-acceleration in subscriber growth or a large commitment from original equipment manufacturers in 2007. And that's just for starters...read more: here

11/03/2006 10:31:00 PM

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