# Will the satellite broadcasting leader Sirius XM turn around?

This company has indeed been having a tough time lately—its stock price has plummeted 68% over the past three years, and the number of subscribers is also on the decline. But interestingly, it is still generating cash flow continuously, with free cash flow in the double digits each year and a dividend yield of 5.2%.

**The key variable is Buffett**. Berkshire currently holds a 37.1% stake in it, which is a signal. Either Warren continues to increase his holdings, or he finds a private equity firm to take over - in either case, minority shareholders can continue to receive dividends.

**Reasons for pessimism**: Declining content competitiveness, especially with Howard Stern's contract expiring next year (the 4th year of a 5-year contract). If the popular DJ does not renew, younger car owners will likely shift to cheaper streaming services.

**Reasons for optimism**: Valuation is cheap (PE ratio is less than 7), dividends are stable, and as long as there are no significant losses of users, it can survive. Analysts expect revenue to grow only 0.8% over three years, but earnings per share can increase by 11%—in other words, profit margins are improving.

**Bottom line assessment**: This is not a growth stock, it is high-yield arbitrage. If you can accept the dividend yield of a declining company, you might consider it; but don't expect the stock price to double. Buffett's shareholding ratio is the real moat.