Stock Buzz: Sirius XM Holdings Inc. (NASDAQ:SIRI)

U.S. stocks rocketed to their biggest gain in eight months following Powell’s comments. The Dow Jones Industrial Average surged 617 points, 2.5 percent, to 25,366.43. The Standard & Poor’s 500 index gained 2.3 percent to 2,743.79. The Nasdaq composite rose 2.9 percent to 7,291.59. Tiffany skidded 11.8 percent after it said foreign tourists, especially from China, didn’t spend as much at its stores in its latest quarter.

Three days before President Donald Trump is due to meet his Chinese counterpart, Xi Jinping, the chief American trade envoy criticized Beijing’s import taxes on American-made cars. Beijing cut auto import duties this year to 15 percent but added a 25 percent penalty on those from the United States in response to Trump’s imposition of similar charges on Chinese goods in dispute over technology policy. U.S. Trade Representative Robert Lighthizer said Chinese duties on American-made cars are “especially egregious,” and said he would “examine all available tools” to equalize charges on auto imports.

Benchmark U.S. crude gained 38 cents to $50.67 per barrel in electronic trading on the New York Mercantile Exchange. It lost $1.27 on Wednesday to close at $50.29. Brent crude, used to price international oils, added 17 cents to $59.26 in London. The contract lost $1.31 the previous session to close at $59.09.

Oil prices were back under pressure after Saudi Arabia said it would not cut production unilaterally. Brent crude fell 2.6 per cent to $58.66 a barrel while West Texas Intermediate declined 2.5 per cent to $50.27.

The dollar declined to 113.43 yen from Thursday’s 113.67 yen. The euro gained to $1.1377 from $1.1368.

Shares of Sirius XM Holdings Inc. (NASDAQ:SIRI) flaunted a rapid change of 1.48% to reach at $6.19 in the last hour of Wednesday’s trading session. The company has experienced volume of 23,495,176 shares while on average the company has a capacity of trading 26.80M share.

Sirius XM Holdings Inc. (SIRI) holds the market capitalization of $27.40B along with 4.43B outstanding shares. The stock price is moving -19.73% off from the highest level of twelve months and -19.61% above from twelve months low. For the stock, price target value has been calculated at $6.86.

Sirius XM Holdings Inc. has shown weekly upbeat performance of 5.45%. Its six months performance -12.82% indicated a bearish movement while its yearly performance reflected a positive trend of 14.00%. Year-to-date (YTD) performance of the stock illustrate upbeat trend of 15.49%. The company’s price sits 0.01% above from its 50-day moving average of $6.07 and -6.36% below from the stock’s 200-day moving average of $6.73. The company has Relative Strength Index (RSI 14) of 52.65 along with Average True Range (ATR 14) of 0.19. Its weekly and monthly volatility is 2.74%, 2.91% respectively. The company’s beta value is at 1.04.

What is PEG Ratio?

PEG ratio or Price/Earnings-Growth ratio is an attempt to normalize the P/E ratio with the expected earnings growth rate of the company.

The idea behind the PEG ratio for stocks is quite simple:

A low P/E ratio can be justified if the future expected earnings growth is low. A fast growing company on the other hand is able to command a higher price to earnings multiple for its stock. To get more accurate idea of the relative valuation of a company, we need to consider the P/E ratio in conjunction with the future earnings per share growth rate.

WHY IT MATTERS:

The PEG ratio acts as a measure of value that takes into account future growth. Using this metric, investors can gauge whether high-growth stocks may be undervalued, even if they don’t appear so with the more common P/E ratio.

Earnings growth expectations are completely unreliable. Any use of the formula is only as good as the numbers that are fed into it as inputs. Any expected earnings growth in the future is just an expectation, and they vary wildly between different analysts. Even if there is a concensus, the future generally turns out to be different than planned. There is competitive changes, loss of market power, product substitutions, management missteps, etc, that we have no way of knowing today.

Typically P/E ratios are backward looking while the earnings growth rate is a forward looking metric. Future P/E ratio will be different than the one we use today. You could project a future P/E ratio if you wish, but this will introduce further uncertainity in the calculations. Still, many investors are fond of using the concept of Forward P/E and Forward PEG ratio. I strongly advise against this.

Negative PEG Ratio Meaning

A negative PEG ratio does not imply that the stock is a bad investment. It just means that you need to consider other ways of looking at the stock before you can judge if this is a good investment or not.

Is It Overvalued? Look at the PEG Ratio

Sirius XM Holdings Inc. (NASDAQ:SIRI) currently has a PEG ratio of 1.24 where as its P/E ratio is 26.45. The company’s price to sales ratio for trailing twelve months is 4.83 and price to book ratio for most recent quarter is N/A, whereas price to cash per share for the most recent quarter is 595.72. SIRI’s price to free cash flow for trailing twelve months is 20.01. Its quick ratio for most recent quarter is 0.20 along with current ratio for most recent quarter of 0.20. Total debt to equity ratio of the company for most recent quarter is N/A whereas long term debt to equity ratio for most recent quarter is N/A. Sirius XM Holdings Inc. has a Return on Assets of 10.70%. The company currently has a Return on Equity of -60.90% and Return on Investment of 22.30%.

Stephanie Reibey

I am Stephanie Reibey, a Senior News Writer for “Stocks News Point”. I covers “Hot Stocks Alert” sector and writes about trending Active Hot companies from an exclusive and “out of the box” perspective. Over the years I have built a network of resources within the Hot Stocks Alert sector I write about. I started investing in 2008 as a hobby, and since it has grown to be my passion. I look for investments that generate strong value in the long run, and also assist shareholders avoid pitfalls through my analysis.